MEMX S&P 500 Share Grows on Strong Quote Performance

MEMX S&P 500 Share Grows on Strong Quote Performance

Equities Highlights

MEMX exchange market share (excluding TRF volume) in S&P 500 stocks grew to 5.3% in May, up from 5.0% in April (Figure 1). Strong quote performance contributed to the growth; MEMX ranked third among exchanges in average time at the NBBO in S&P 500 stocks. In May, MEMX quoted over 75% of the time at the NBBO in 152 symbols and over 50% of the time in 235 symbols (Figure 2).

Figure 3 shows trading and quoting data in individual S&P 500 symbols. MEMX provides superior quoting in many S&P 500 stocks. For example, MEMX ranked at least third in average time at NBBO in many active stocks (including AMZN, AMD, F, AAPL, GOOGL, NVDA, MSFT), and was the first to set the best NBBO prices a significant percentage of the time.

Options Update

MEMX Options has released the latest schedule updates and specifications for the exchange launch.

• Pre-Production Environment  

  Monday, June 12, 2023: Port requests, order entry, order cancel, execution, and drop copy functionality, along with market data

  Login and market data details provided upon request by emailing mops@memx.com

• MEMX Options Development Environment (MODE)

  Monday, August 7, 2023: All functionality

• User Acceptance Tests  

  Saturday, August 19, 2023

  Saturday, August 26, 2023

  Saturday, September 9, 2023

• Production Phased Launch  

  Wednesday, September 13, 2023: Initial symbol tranche

  Wednesday, September 20, 2023: Second symbol tranche

  Wednesday, September 27, 2023: Remaining symbols

Updated specifications are available for download at: https://www.memxtrading.com/. Preferences may be updated to subscribe to options notices here: https://info.memxtrading.com/.

MULN Becomes Tick Constrained, Spread Widens Over 330%

In April, MULN’s price traded around $0.06 to $0.11. It was one of the most active stocks in the market, accounting for 3.3% of industry volume with 345 million average daily shares traded. On May 4, MULN did a 1-for-25 reverse stock split in order to satisfy the Nasdaq’s minimum price requirement and its stock price closed at $1.47, up from $0.06 on May 3.

With MULN trading over $1, it became tick constrained (i.e., the average NBBO spread was consistently $0.01) and the average quoted spread in basis points increased 331%, from 15.6 on May 3 to 67.3 on May 4 (Figure 4). On May 22, MULN’s price then fell below $1 and the average quoted spread in basis points immediately declined 82%.

MULN’s stock split provides another data point on how the current one-size-fits-all tick regime impacts quoted spreads and investor trading costs. There is broad industry support for reducing the minimum pricing increment in tick-constrained stocks from 1 cent to ½ cent, as MEMX has consistently recommended.

There is also a significant amount of retail trading in MULN. Allowing exchanges and ATSs to fully display orders in retail liquidity programs at minimum increments of 10 mils—as MEMX and several other market participants have recommended as a better alternative to the SEC’s December market structure proposals—would facilitate additional price improvement opportunities for retail investors without upending a market structure that has served these investors well.

With MULN’s price moving above $1, overall sub $1 volume declined to 10.1% of industry volume in May (from 16.1% in April) and the amount of volume in stocks priced between $1 and $10 increased to 26.1% in May (from 23.5% in April) (Figure 5). Since May 22, MULN has resumed trading below $1.