Trade Informatics Analysis Supports SEC Tick Size Pilot Program


Last October, the SEC launched the Tick Size Pilot Program. As the first year anniversary of the program approaches, market participants need to turn to the data to properly assess the impact of the changes on trading outcomes for the affected securities.

Trade Informatics, a provider of quantitative trading analytics serving institutional investors globally, is leveraging its expertise in trading data analysis to help institutional investors analyze changes in liquidity, volatility and trading quality for securities in each of the program’s four test groups.

Based on data compiled from a subset of asset managers impacted by the program, Trade Informatics reports that median implicit costs for the control group fell over the first full 11 months of the program compared with the 11-month period prior to the inception of the program.  Over the same period, costs rose slightly for securities in Group 1 and fell for securities in Groups 2 and 3.

Trade Informatics uses an advanced suite of analytics solutions to quantify the program’s impact on the execution performance for institutional investors active in pilot program securities.

The Tick Pilot Size Program is a national market system (NMS) plan designed to help regulators, market participants and the public to assess the impact of larger tick sizes on the trading of certain companies with market capitalization below $3 billion.

Pilot Securities are divided into three groups:

  • Securities in the Control Group continue to quote and trade in increments of $0.01 per share
  • Securities in Test Group One are quoted in $0.05 per share increments but trade in regular price increments
  • Securities in Test Group Two quote and trade in $0.05 per share increments
  • Securities in Test Group Three quote and trade in $0.05 per share increments. Securities in Test Group Three are also subject to a “Trade-At” rule which prevents price-matching at a trading center that is not displaying the best price.

The program went live on October 3, 2016 and will last for a period of two years.



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