Give a Penny, Take a Penny... How About a Half-Penny?

Give a Penny, Take a Penny... How About a Half-Penny?‍

When it comes to trading assets, the "how" and "where" aren't just details—they’re the backbone of an asset’s value. Big bid-ask spreads can kill liquidity, making investors demand higher returns to offset the illiquidity premium. Limiting who can participate leads to fewer bids and lower prices.

‍Stocks

Back in the day, trading stocks wasn’t exactly cheap or efficient. The bid-ask spread was as wide as ⅛ of a dollar—12.5 cents! But the mid-90s ushered in a wave of change, shrinking spreads to 6.25 cents in 1997 and down to just a penny by 2001. And guess what? The SEC just gave the green light to let some stocks trade in half-penny increments. Yep, we’re getting that granular now.

But wait, it gets better. Back in the 1980s, stock brokers were making a killing off commissions—around $200 per trade. This was despite Charles Schwab offering trades at $70 starting the race to the bottom. By the 90s, commissions had dropped to $40 per trade, nosediving to $13 in the 2000s, and then to the magic number: $0, thanks to Robinhood in 2019. It didn’t take long for all the other major retail brokers to jump on that bandwagon.

The result? A trading revolution. Retail trading volumes skyrocketed, fueled by the decrease in both bid-ask spreads and commissions. Households have been steadily increasing their stock exposure since the 1980s, with a few dips during recessions, of course. And with the cost of trading dropping, volumes have exploded.

*See charts for the meteoric rise in household stock ownership and trading volumes.* 

Source: BusinessInsider.com

Bonds

Bonds, for the longest time, had an even murkier situation than stocks. Bond traders weren’t required to disclose the bid-ask spread, meaning some traders were raking in thousands per transaction. Enter TRACE, the FINRA system that forced traders to come clean by posting all trades within 15 minutes, revealing the bid-ask spreads. Just like with stocks, transparency led to tighter spreads and cheaper trading—and more people jumping into the bond game.

Source: FINRA

‍Illiquid Assets

Now, let’s talk about the big leagues: illiquid assets. If you own something like a $10 million Picasso, a $50 million private equity stake, or a $100 million chunk of a startup unicorn, you’re facing the same challenges that stocks and bonds once had—plus a unique twist. These assets typically only attract a small, elite subset of buyers—those who can write a check big enough to cover the whole thing. But what about the rest of the market? The smaller investors who’d love to own a piece of these prized assets. Historically, it’s been a logistical nightmare to get them organized quickly enough to participate.

‍Enter aShareX Auctions

aShareX auctions are here to change the game. Instead of limiting the pool of buyers to those who can afford 100% of the asset, aShareX opens the doors to everyone. Whether you want to write a check for $500 or $50 million, you’re invited. These auctions organize fractional bidders in real-time, allowing them to compete head-to-head with full-asset buyers. 

It’s all about letting the demand curve dictate the action, giving smaller bidders the power to rival the biggest institutions. For asset owners, that means more competition, a broader pool of buyers, and ultimately—achieving the true market price.

Why sell your asset to just one buyer when you can have hundreds, each competing for a slice? That’s the future of trading, and aShareX is leading the charge.

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