A few weeks ago, we covered new Reg NMS round lots, and hypothesized that the change would help lower spreads for high-priced stocks.
Since the new round lots went into effect on Nov. 3, 2025, over 250 symbols have been trading with a new round lot for a little over a month. Today, we dive into the universe of symbols with a new round lot and what the impact on trading has been.
Only 3% of listings have a new round lot
Any stock or exchange-traded product (ETP) priced over $250 in September 2025 received a new round lot in November.
However, it turned out to only affect around 250 symbols — probably less than you might have thought given the work that went into this change. Overall, that’s only 3% of listings, made up of 1% of ETPs and 4% of corporate equities.
Despite that, the impact of this change is more significant than it sounds. Thanks to the types of stocks that have high prices, this represents:
- 23% of the S&P 500 constituents and 40% of the stocks in the Dow.
- 38% of all value traded in the Nasdaq-100® (although only 17% of the shares traded).
- 36% of all value traded in the S&P 500.
Chart 1: Major indexes saw 25%-40% of constituents get new round lots
The large impact across these benchmark indexes is because many of the largest companies still have relatively high share prices. Notably:
- For the 40-share round lot, 197 companies were affected, including META, TSLA, ULTA, and ADBE.
- For the 10-share round lot, 14 companies were affected, including BKNG and MELI.
- For ETPs, 39 have a 40-share round lot, including QQQ and SOXX.
Because of that, the stocks with smaller round lots actually represent a much larger proportion of value traded. In fact, the stocks with new round lots add to 27% of average daily value traded (ADVT).
That means, for traders, these changes are more impactful than they might first seem.
Spreads and depth both decrease for the selected high-priced stocks
All the work we (and others) have done on ticks and depth indicated that smaller round lots would reduce depth but also tighten spreads.
Not surprisingly, that was exactly what we found:
- Stocks with a 10-share round lot saw an average spread decline of 50% (from 61 basis points (bps) to 30bps).
- Stocks with a 40-share round lot average spreads compressed 34% (from 42bps to 25bps).
- ETP spreads (all affected ETPs got a 40-share round lot) fell by 8% (from 4.3bps to 3.6bps).
Chart 2: Spreads decreased significantly, and almost immediately, for affected stocks
Not surprisingly, with less depth required to qualify for an NBBO resulting in tighter spreads, we also saw depth reduce.
Chart 3: Depth also decreased significantly for affected stocks
Although remember that these different round lots were specifically selected to retain an NBBO depth worth at least $10,000. That was done so the new NBBO still represents a reasonable amount of liquidity for institutional investors to trade against, and retail investors to be benchmarked against.
The U-shape for spreads almost disappeared
Despite smaller spreads, Chart 2 shows that these high-priced stocks still have spreads that are multiple ticks wide. That means there are still “too many ticks” inside these new spreads. Consequently, we expected to see market spreads still forming the familiar U-shape based on stock price.
In fact, what early data shows (purple line) is that although these stocks are not at their “optimal” spread – the U-shape is definitely flattened for higher priced stocks. That means stocks above $250 (with smaller round lots) seem to be trading more like stocks in the $150-$250 (and 100-share round lot) group now.
Chart 4: New NBBO spreads still wider than odd lot spreads
We also see that these new spreads do remain well above the “odd lot” spreads in the market – that will also likely be soon added to Rule 605 reports.
Crossing the Nasdaq-100® basket is 1 basis-point cheaper now
If we consider how the different spreads of each stock in the Nasdaq-100® add to the cost of crossing the portfolio spread, we find that the basket spread has fallen from 5.5bps to 4.5ps – making it 1bps cheaper.
That’s because a number of the largest stocks in the Nasdaq-100® received new round lots. In the chart below, we rank stocks by index weight and show stocks with new round lots in pink and blue. The circle size shows each stock’s relative liquidity. The curve of circles shows the incremental cost that each stock adds to the portfolio’s spread cost; the curve of grey bars shows the incremental portfolio weight each stock adds.
Chart 5: Trading costs in Nasdaq-100® basket declined almost 20% with many stocks seeing smaller round lots
New round lots worked as expected
Looking at the data, these new round lots worked as expected. The market adapted to them and their new economics instantly – depth and spread costs both fell.
Although relatively few stocks changed, the impact on trading, especially for institutional investors, is larger – thanks to the concentration of large and liquid stocks with higher share prices.
New, tighter spreads protect retail and institutional investors crossing spreads off exchange in these stocks. For a basket like the Nasdaq-100®, that could have reduced their trading costs by around 18%.
