Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, June 29, 2007

SEC Announces Results of Penny Quoting Pilot

The SEC announced today that early results from the Penny Quoting Pilot program show lowered trading costs for retail trades. An analysis of reports from the options exchanges by the Commission's Office of Economic Analysis indicate that the Pilot has been successful in narrowing average quoted spreads, which enables investors to trade options at better prices. The reduction in spreads also has led to a reduction in payment for order flow.

The Penny Quoting Pilot began in January 2007 after SEC Chairman Christopher Cox urged each of the options exchanges to begin quoting a limited number of options in pennies.

More information and links to the reports from options exchanges are available at the SEC website.

http://lawprofessors.typepad.com/securities/2007/06/sec-announces-r.html

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