3 ms·
There are already contracts trading at fractional cent prices. For an example see treasury bonds listed on CME. According to CME document[1] margin and option p
by dm3 6y ago
There are already contracts trading at fractional cent prices. For an example see treasury bonds listed on CME. According to CME document[1] margin and option premium calculations round the amount to nearest cent. I suppose the same happens at settlement.
[1] https://www.cmegroup.com/trading/interest-rates/files/TreasuryFuturesPriceRoundingConventions_Mar_24_Final.pdf https://www.cmegroup.com/trading/interest-rates/files/Treasu...
- cm2187 6y agoBut then you can arbitrage it. Buy 10,000 times 1 share, sell 10,000 shares. You can't really do that in the bond market, but you can in the equity market.
- dm3 6y agoI think practically this would have to be solved by the equity brokers. All the intermediary accounting done in fractions and only rounded once cash leaves the broker.