ASX - Do you ATS mkts or Iceberg orders?

[sethro]

Hi all,

I am a trader from Canada, I know a lot about trading the Canadian mkt but not much yet about the ASX (I am slowly learning). Both seem quite similar.

In Canada we now have "alternative trading systems", which means I no longer HAVE to buy / sell my stock on just the Toronto Stock Exchange, I can also post my bids / offers on any one of the ATS systems (alpha, chix, pure trading, omega).

It is important here in Canada to look at all these mkts before buying / selling. Just curious does Australia have similar ATS market places, or is it just simply the ASX and thats it?

Also in Canada we have what is called an "Iceberg" order, basically an offer / bid may show only 10,000 shares but is really 1,000,000 shares. It just keeps renewing itself every time 10,000 is purchased / sold. Does the ASX allow iceberg orders, or anything similar?

Thanks for any comments / help. I would be more than happy to help someone learn about the Canadian mkts if they were willing to help me learn the ASX.

Cheers,

 

[pixel]

G'Day sethro, and welcome Down Under

FWIW, I have been trading the ASX market for a couple of decades, but ATS doesn't sound like anything I can think of.
We do have two Exchanges, the ASX taking up the lion's share; a relatively new NSX (National Stock Exchange) having listed only a few small(ish) stocks and being supported by only about a dozen brokers:
http://www.nsxa.com.au/broker_list.asp
But it's gaining some momentum and recognition.

Iceberg bids and offers are also known here; they're called 'Undisclosed' and marked by a U/ in market depths. They must contain at least $250,000 worth of stock; once they have been filled to the extent where the outstanding quantity drops below that threshold, they must be replaced by the remaining number.
(Note: That threshold may have been increased since I last looked it up.)

Finally, the ASX allows "algorithm trading", also known as 'bots (from trading Robots). Those trades are usually executed by a computer program that places buy or sell orders every few minutes or even seconds in ridiculously low quantities, accumulating or distributing substantial quantities - supposedly without distorting the market.

 

[glenn_r]

I believe Australia will also have a Chi-X in October which will be interesting to say the least.

Some pundits are worried about the lack of information Chi-X release on trade volumes from the big players so called dark pools, but it might make the ASX cut their over the top brokerage and data fee's.

http://www.chi-x.asia/apac/au/

 

[skc]

G'Day sethro, and welcome Down Under

FWIW, I have been trading the ASX market for a couple of decades, but ATS doesn't sound like anything I can think of.
We do have two Exchanges, the ASX taking up the lion's share; a relatively new NSX (National Stock Exchange) having listed only a few small(ish) stocks and being supported by only about a dozen brokers:
http://www.nsxa.com.au/broker_list.asp
But it's gaining some momentum and recognition.

Iceberg bids and offers are also known here; they're called 'Undisclosed' and marked by a U/ in market depths. They must contain at least $250,000 worth of stock; once they have been filled to the extent where the outstanding quantity drops below that threshold, they must be replaced by the remaining number.
(Note: That threshold may have been increased since I last looked it up.)

Finally, the ASX allows "algorithm trading", also known as 'bots (from trading Robots). Those trades are usually executed by a computer program that places buy or sell orders every few minutes or even seconds in ridiculously low quantities, accumulating or distributing substantial quantities - supposedly without distorting the market.

Just to clarify the Newcastle stock exchange have different companies listed compared to the ASX. So you won't have a situation where you can potentially get better / worse price on a different exchange for the same company.

Thanks for the post, pixel. I didn't know what the "u" stands for until now.

 

[sethro]

Hey Guys, Thank you all so much for your replies. If you don't have ATS markets now you will in a year or two. They are picking up speed world wide.

I wouldn't worry much about Chi-X. They have been in Canada for some time now and basically on list larger blue chip stocks, Chi-X does not list junior securities (yet); I trade juniors so I don't use Chi-x.

One thing that is very different re Australia and Canada is the share floats. It seems many of the Aussie juniors have a much larger number of shares outstanding than in Canada. Also in Canada we trade in 1/2 cent increments up to 50 cents. While I believe Australian penny stocks trade in 0.001 cent increments.

Cheers... Sethro

 

[pixel]

Hey Guys, Thank you all so much for your replies. If you don't have ATS markets now you will in a year or two. They are picking up speed world wide.

I wouldn't worry much about Chi-X. They have been in Canada for some time now and basically on list larger blue chip stocks, Chi-X does not list junior securities (yet); I trade juniors so I don't use Chi-x.

One thing that is very different re Australia and Canada is the share floats. It seems many of the Aussie juniors have a much larger number of shares outstanding than in Canada. Also in Canada we trade in 1/2 cent increments up to 50 cents. While I believe Australian penny stocks trade in 0.001 cent increments.

Cheers... Sethro

That's an easy one:
Below 10c, the increments are 0.1c - they're called the "penny dreadfuls".
From 10c to $2 (used to be 50c), the increments are 0.5c;
Above $2 it's a full cent - right up to $100 and beyond.

Recently, the computer-traders have "introduced" a mid-point crossing, which sees some odd trades go through at the mid-point between highest bid and lowest offer. So, if those are just one increment apart, such transactions can come out as 7 shares at $1.9725 each or 18 shares at $5.675 apiece. I don't think your friendly online broker will accept an order like that, so it's got to be an aberration by some algorithmic trades - aka 'bots.

 

[skc]

That's an easy one:
Below 10c, the increments are 0.1c - they're called the "penny dreadfuls".
From 10c to $2 (used to be 50c), the increments are 0.5c;
Above $2 it's a full cent - right up to $100 and beyond.

Recently, the computer-traders have "introduced" a mid-point crossing, which sees some odd trades go through at the mid-point between highest bid and lowest offer. So, if those are just one increment apart, such transactions can come out as 7 shares at $1.9725 each or 18 shares at $5.675 apiece. I don't think your friendly online broker will accept an order like that, so it's got to be an aberration by some algorithmic trades - aka 'bots.

I must say that is something the ASX can and should improve on.

A 10c stock need to rise 5% to get to 10.5c. That is, the spread is 5%.

A 25c stock has a minimum spread of 2%, $1 stock has minimum spread of 0.5%. And a $2 stock has also a 0.5% spread, even though the $1.99 stock has a spread of only half that.

These spreads are much bigger than they need to be imo. Technologically I see no reason why 0.1c increments cannot be used for anything up to $2, 0.5c for $2 to $5 and full cent from there on.

 

[sethro]

SKC. You want to talk about big spreads, here in Canada everything is 1/2 a cent all the way down to 1/2 cent.

So you buy something at 0.005 cent your only option is to sell it at 1 cent and make 100%. I personally like this system, it makes it a lot easier to make money trading sub 10 cent penny stocks. I really hope Canada does not change it system and more into 1/10th of a cent

cheers