Odd lots do not have to be represented in the NBBO. They do have
to
trade if given the opportunity though.
So does this mean that I can put a buy and a sell order inside the
spread, and if the orders are odd lots, they are effectively
invisible, at least on the level 1? I'm thinking there must be a
huge disadvantage to this, like full lots are given execution
priority (at that level), or it would be too advantagous.
FYI, I know IB forbids you from making markets in options. I
wouldn't be surprised to see something similiar in stocks. I know
back in the old days it was not legal for complete automation, even
on a fully certed OTC dealer desk.
I tried it out on my account it indeed, it does work for stocks.
There's a specific regulation in the options market that forbids
opening two opposit positions on the same option (something to that
effect). I dont' think it exists for stocks, unless someone knows
better.
I have seen similar programs in the forex market (where the market
makers are real A**holes, more so than any equity MM can ever be).
I'm surprised that they aren't more prevasive in the equity market,
or at least, I know they exist but they are never advertised. Does
anyone know the reason?
Cheers,
JS
