.
Technically speaking the spread could be any positive or negative number. But the market is so efficient that they do not last long.
Also we need to realize that the spread is just a "difference" between 2 prices the bid and the ask. We don't pay it. If we want to buy
we pay the ask if we want to sell we get the bid. So, the so called ECN probably contain a few dozen Bid and ask prices for all sort of
amount placed by the many participants. I would be impossible to know all the differences between them.
A ECN broker's "system" would find ask prices equal to bid prices once in a while (zero spread) or even ask below bids and quote
negative spread.... but how long you think that last in the ECN?? they get hit immediately and most likely we never get it. But someone did.
I assume if a Broker calls for a "minimum" Spread, they would be pocketing the difference if they find zero spreads. If they write it
in their agreement with their clients, it makes it legal.
J
Technically speaking the spread could be any positive or negative number. But the market is so efficient that they do not last long.
Also we need to realize that the spread is just a "difference" between 2 prices the bid and the ask. We don't pay it. If we want to buy
we pay the ask if we want to sell we get the bid. So, the so called ECN probably contain a few dozen Bid and ask prices for all sort of
amount placed by the many participants. I would be impossible to know all the differences between them.
A ECN broker's "system" would find ask prices equal to bid prices once in a while (zero spread) or even ask below bids and quote
negative spread.... but how long you think that last in the ECN?? they get hit immediately and most likely we never get it. But someone did.
I assume if a Broker calls for a "minimum" Spread, they would be pocketing the difference if they find zero spreads. If they write it
in their agreement with their clients, it makes it legal.
J