Hidden size, tape delay, and pairs shorts belong in the trade rule

Working size the public book does not show

Large equity orders can be matched in undisplayed liquidity pools, so the public book never shows the full working size. That matching venue is a dark pool: it is used to work large size without showing the full order on the public book.

A reserve order is a booked order that replenishes displayed size from a hidden remainder. An iceberg order shows only a slice of its working size while the remainder stays reserved. Both already allowed a trader to display 500 shares while working a 5,000-share order.

Delayed reports, not omitted prints

Undisplayed fills were described as delayed reports rather than omitted prints. Official windows were 30 to 90 seconds, and some venues claimed as long as five minutes.

Settlement still requires matched, offsetting records at exchanges and clearing firms, including when a print is booked away from the primary market. The archive describes delay, not a missing print.

Price improvement between the displayed bid and offer

A smart router can search undisplayed venues between the national best bid and offer, which is the prevailing best displayed bid and offer used as the public pricing frame. With a 0.05 bid and a 0.09 offer, a sell can be filled at 0.07, or size can be posted inside that spread.

A fill inside the prevailing displayed bid-offer spread is price improvement. The search is part of how the order is specified, not a later cleanup step.

Tape reading when displayed size is incomplete

Because displayed size can understate working size, tape reading remains necessary. Tape reading here means treating prints and displayed size as incomplete evidence of working quantity and intent.

A print or quote does not by itself show the reserved remainder of a reserve order or iceberg order, or size waiting in a dark pool. The tape still has to be read after a delayed report arrives.

Pairs shorts after the uptick wait

After the uptick wait was removed, hedged correlated-pairs shorts no longer needed an uptick. Pairs trading is a hedged long-and-short procedure whose entries, exits, and shorts are constrained by routing and short-sale rules. The former uptick rule had required waiting for an uptick before selling short.

Pairs and merger volume was described as higher over the following 12 months. The contemporaneous assessment was that downside volatility had not clearly risen after the uptick change, and that aggressive index-level selling would invite offsetting arbitrage rather than a one-way decline.