Singapore Exchange (SGX)

[benjy]

Yes. Especially for those who buy shares by paying up front. They should reduce the brokerage charges. There is no risk for the TR/remiser or broker at all. They only incurred cost for providing the trading platform. In future if they implement the platform when the sell trade is linked to the account holder CDP holdings directly.; there will also not be any risk for the remiser/dealer or broker. Hence the brokerages charges should also be reduced. For value buddies, I doubt we use the 3 day window period for contra trading anyway since we tend to buy and hold for longer periods than swing or short term traders.

[GPD]

Probably useless when minimum trading fee of $25 per trade... doesn't make sense to buy 100 shares with such high transaction costs

I don't think minimum trading fee is under the SGX since the fee can be different between houses and in some cases nil.

[egghead]

I cannot understand why they can't just do away with the idea of a lot size. Go straight to unit share. If retail investors like to buy 1 share of OCBC for $10 but pay $25 for trading fee, let them. Who will be so gong anyway?

[CityFarmer]

I cannot understand why they can't just do away with the idea of a lot size. Go straight to unit share. If retail investors like to buy 1 share of OCBC for $10 but pay $25 for trading fee, let them. Who will be so gong anyway?

Well, the minimum $25 is brokering fee, which is nothing to do with SGX. There are no minimum for clearing and trading fees, which are from SGX, thus lots size matter

[egghead]

Ok, I'll put it in another way. What are the considerations against going to unit share? Why is there a need to stick to the concept of lot size which is likely based on physical script (but we've gone script-less so long ago).

[CityFarmer]

Ok, I'll put it in another way. What are the considerations against going to unit share? Why is there a need to stick to the concept of lot size which is likely based on physical script (but we've gone script-less so long ago).

There is still cost per transaction, even though it is smaller than before.

The same concept as mechanizes are sold in package, rather than in pieces, for small value and low margin items.

[Ben]

Another consideration if people are allowed to buy by per unit instead of lot, it is going to tax the system considerably. Imagine one wants to buy 1000 shares, and instead of entering an order for 1 lot, or 10 lots, he enters 1000 orders of one share each. The system needs to execute 1000 times instead of 1 time, or 10 times. This is not going to be very efficient.

[Bibi]

I cannot understand why they can't just do away with the idea of a lot size. Go straight to unit share. If retail investors like to buy 1 share of OCBC for $10 but pay $25 for trading fee, let them. Who will be so gong anyway?

Sometimes investor wants to buy 10,000 shares. But some small retail player using Standard Chartered account sold him 1 share.

[weijian]

Ok, I'll put it in another way. What are the considerations against going to unit share? Why is there a need to stick to the concept of lot size which is likely based on physical script (but we've gone script-less so long ago).

There is still cost per transaction, even though it is smaller than before.

The same concept as mechanizes are sold in package, rather than in pieces, for small value and low margin items.

It seems like the consideration of trading in board sizes, are in the interests of the company/brokerages, rather than the investors (what's new!?). Generally, it seems like the algorithm matching will be more tedious/need higher bandwidth, and also the companies' IR needs to do more work (desemination of ARs, circulars etc) are the main considerations as unit size gets lower....

http://www.investopedia.com/terms/b/boardlot.asp
http://www.mas.gov.sg/news-and-publicati...ading.aspx

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Yes. Especially for those who buy shares by paying up front. They should reduce the brokerage charges. There is no risk for the TR/remiser or broker at all. They only incurred cost for providing the trading platform. In future if they implement the platform when the sell trade is linked to the account holder CDP holdings directly.; there will also not be any risk for the remiser/dealer or broker. Hence the brokerages charges should also be reduced. For value buddies, I doubt we use the 3 day window period for contra trading anyway since we tend to buy and hold for longer periods than swing or short term traders.

Our dear brokerages need to continue to incur costs support all their analysts...or else, where got our nice nice BUY reports for us to feel good after reading?

[egghead]

Interesting answers but I'm not convinced.

1. With the many odd ratios used in rights/bonus issues, script dividends, etc, odd lots is a certainty and will be what's left after shareholders dispose of the bulk in multiples of lot size. Just ask our buddy GG

2. Matching of trades in board lots is no different from odd lots. Even in today's queue system, when you enter one trade for 5,000 shares, you may be buying/selling from/to several counter parties. I don't agree that it will result in more trades. In fact, I think the mechanism and algorithm are the same - just that the unit is changed.

3. The lack of market makers for odd lots is precisely due to the use of board lots causing the odd lots to be less "valued" (see the larger bid/ask spread).