Shares are normally traded in specific amounts called Board Lots of 100 units. Any amount less than board lots are called special lotsor odd lots.
Minimum Bids
The tick size is the minimum price variation between the buy and sell price for a stock. The tick size is reduced in line with the current practice by global developed markets and more importantly, to create market depth, enable price discovery and boost liquidity in the local equities market.
The tables below describe the new tick size structure.
Table I - Tick Sizes for Securities Traded and Quoted On Bursa Malaysia
| Price Range | Tick Size (Sen) |
|---|---|
| Below RM1.00 | 0.5 |
| RM1.00 up to RM9.99 | 1 |
| RM10.00 up to RM99.98 | 2 |
| RM100.00 above | 10 |
Table II - Tick Sizes for ETF
| Securities | Market Price | Tick Size (Sen) |
|---|---|---|
| ABFMY1 | At any price | 0.1 (no change) |
| Equity-based ETFs | Less than RM1.00 | 0.1 |
| Between RM1.00 to RM2.995 | 0.5 | |
| RM3.00 and above | 1 |
For bonds, debentures, loan securities, warrants and call warrants, the minimum bid structure has the same minimum trading spreads as for shares.
Buying-In Price For Undelivered Securities
In respect to the bidding price for buying-in, the Exchange will retain the ten (10) ticks. Arising from this, the buying-in price will be based on the current tick structure (Table III) and tick sizes rather than the new tick size structure and to ensure that the buying-in price is attractive to potential sellers.
Table III - Current Tick Size Structure
| Price Range | Tick Size (Sen) |
|---|---|
| Below RM1.00 | 0.5 |
| RM1.00 to RM2.99 | 1 |
| RM3.00 to RM4.98 | 2 |
| RM5.00 to RM9.95 | 5 |
| RM10.00 to RM24.90 | 10 |
| RM25.00 to RM99.75 | 25 |
| RM100.00 above | 50 |
In computing the buying-in price, the buying-in price will be rounded up to the next tick size if the closing price falls between two tick sizes. For example if the closing price is between RM10.02 and RM10.08, the buying in price will be rounded up to RM11.10 as illustrated below:
Table IV - Buying-In Price Computation
| Closing Price (Based on new tick size) | Buying-in Computation (Based on the current tick size) | Buying-in Price |
|---|---|---|
| RM10.00 | 10.00 + 1.00 (10 x 0.10 = 1.00) = RM11.00 | RM11.00 |
| RM10.02 | 10.02 + 1.00 (10 x 0.10 = 1.00) = RM11.02 | RM11.10 (rounded up to RM11.10) |
| RM10.04 | 10.04 + 1.00 (10 x 0.10 = 1.00) = RM11.04 | RM11.10 (rounded up to RM11.10) |
| RM10.06 | 10.06 + 1.00 (10 x 0.10 = 1.00) = RM11.06 | RM11.10 (rounded up to RM11.10) |
| RM10.08 | 10.08 + 1.00 (10 x 0.10 = 1.00) = RM11.08 | RM11.10 (rounded up to RM11.10) |
| RM10.10 | 10.10 + 1.00 (10 x 0.10 = 1.00) = RM11.10 | RM11.10 |
In the case of ETFs, currently the buying-in price is based on (10) ticks of the tick sizes of the ETF. As the tick size is small, in the event of failed trade the buying in price is not attractive for potential sellers to sell. For example in the case of ABFMY1 the minimum tick size is 0.1sen.
Applying 10 ticks to the minimum tick size (0.1x10) would be 1sen. This would not be enough to cover the transaction cost of the potential seller.
For the purpose of buying-in of ETFs, the same buying-in structure for stocks to be applied for ETFs as follows:
Table V - Buying-in Price for ETF will be based on the following tick sizes
| Price Range | Tick Size (Sen) |
|---|---|
| Below RM1.00 | 0.5 |
| RM1.00 to RM2.99 | 1 |
| RM3.00 to RM4.98 | 2 |
| RM5.00 to RM9.95 | 5 |
| RM10.00 to RM24.90 | 10 |
| RM25.00 to RM99.75 | 25 |
| RM100.00 above | 50 |
For example in the case of FB30ETF if its traded in the range of RM5.77, the buying-in tick will be under the range of RM5.00 to RM9.95 which is 0.05.Therefore the buying-in price premium will be (10 ticks X 5sen) 50sen.
Click the link below for more information on Tick Size:
