A couple of weeks in the past, we coated the brand new Reg NMS spherical lot and hypothesized that this transformation may assist decrease spreads on high-priced shares.
Over 250 symbols have been buying and selling within the new spherical lot for simply over a month because the new spherical lot took impact on November 3, 2025. Right this moment we’ll dive into the world of symbols with new spherical tons and their implications for buying and selling.
Solely 3% of listings have new spherical tons
Shares and exchange-traded merchandise (ETPs) above $250 as of September 2025 obtained a brand new spherical lot in November.
Nonetheless, it seems that solely about 250 symbols are affected. Contemplating the work that went into this transformation, it is most likely lower than you may think. Total, this represents simply 3% of listed shares, together with 1% of ETPs and 4% of company shares.
Nonetheless, the influence of this transformation is extra vital than you may assume. Because of the forms of shares which have larger costs, this represents:
23% of S&P 500 shares, 40% of Dow shares. 38% of all Nasdaq-100® buying and selling worth (however solely 17% of shares traded). 36% of all S&P 500 buying and selling worth.
Chart 1: 25% to 40% of constituents in main indexes purchase new spherical tons
This has a big influence on these benchmark indexes general, as lots of the largest firms nonetheless have comparatively excessive inventory costs. particularly:
Within the 40-stock spherical lot, 197 firms have been affected, together with META, TSLA, ULTA, and ADBE. Within the 10-share spherical lot, 14 firms have been affected, together with BKNG and MELI. For ETP, 39 firms together with QQQ and SOXX have 40 inventory spherical tons.
Due to this fact, shares with smaller spherical tons really characterize a a lot bigger proportion of the commerce worth. The truth is, shares with new spherical tons characterize 27% of their common each day buying and selling worth (ADVT).
So for merchants, these modifications have a much bigger influence than it appears at first look.
Each unfold and depth are lowered for chosen high-priced shares
All of the analysis we (and others) have carried out on ticks and depth has proven that making the spherical lot smaller not solely reduces the depth, but additionally reduces the unfold.
Not surprisingly, that is precisely what we discovered.
For shares in spherical a number of 10 shares, the common unfold decreased by 50% (from 61 foundation factors (bps) to 30 bps). For shares in a 40-share spherical lot, the common unfold narrowed by 34% (from 42bps to 25bps). ETP spreads (all affected ETPs are 40 share spherical tons) decreased by 8% (from 4.3bps to three.6bps).
Determine 2: Spreads for affected shares decreased considerably and nearly instantly
Not surprisingly, we discovered that much less depth was wanted to qualify for the NBBO, leading to tighter spreads and fewer depth.
Exhibit 3: The depth of affected shares has additionally decreased considerably.
Nonetheless, keep in mind that these completely different spherical tons have been particularly chosen to keep up at the very least $10,000 value of NBBO depth. This was carried out in order that the brand new NBBO would nonetheless present an acceptable quantity of liquidity for institutional buyers to commerce on and retail buyers to benchmark towards.
The U-shape of the unfold has nearly disappeared.
Regardless of the narrowing spreads, Determine 2 exhibits that the spreads for these high-priced shares are nonetheless a number of ticks large. Which means there are nonetheless “too many ticks” inside these new spreads. In consequence, we anticipated market spreads to proceed forming a U-shape based mostly on inventory costs.
The truth is, early information (purple line) exhibits that whereas these shares would not have “optimum” spreads, the U-shape is unquestionably flattening for high-priced shares. So at present, shares above $250 (and small spherical tons) appear to be buying and selling equally to shares within the $150-250 (and 100 spherical tons) group.
Chart 4: New NBBO unfold nonetheless wider than fractional lot unfold
We are able to additionally see that these new spreads are nonetheless considerably larger than the market’s “odd lot” spreads. This may increasingly even be added to the Rule 605 report quickly.
Crossing the Nasdaq-100® Basket is now 1 foundation level cheaper
In case you think about how the completely different spreads for every Nasdaq-100® inventory add to the price of crossing the portfolio unfold, you possibly can see that the basket unfold has dropped from 5.5bps to 4.5bps, 1bps cheaper.
That is as a result of lots of the main shares within the Nasdaq-100® obtained new spherical tons. The chart under ranks shares by index weight and exhibits shares with new spherical tons in pink and blue. The scale of the circles signifies the relative liquidity of every inventory. The round curve exhibits the incremental price that every inventory provides to the portfolio’s unfold price. The grey bar curve exhibits the incremental portfolio weight that every inventory provides.
Chart 5: Nasdaq-100® basket buying and selling prices have fallen by nearly 20%, with smaller spherical tons for a lot of shares
The brand new spherical lot labored as anticipated
Wanting on the information, these new spherical tons carried out as anticipated. The market immediately tailored to them and their new financial circumstances, and each depth and unfold prices fell.
Though there are comparatively few unstable shares, they’re concentrated in large-cap shares with excessive inventory costs and excessive liquidity, so the influence on buying and selling, particularly on institutional buyers, is bigger.
The brand new narrower spreads defend retail and institutional buyers from exceeding off-exchange spreads for these shares. For a basket just like the Nasdaq-100®, transaction prices might have been lowered by about 18%.
