I am referring to retail vs institutional traders of course. Some examples include commissions, inside info etc.
One thing I noticed recently was that of option prices. I had some WOTM Woolworths (WOW) puts recently which I was trying to close. Fair value was approximately $0.007. As a retail trader, I could submit a sell order for either $0.005 or $0.010 as the order price increments were limited to $0.005.
On the next morning, I noticed the the previous close of the WOW put was $0.008. This meant that some trader was able to circumvent this $0.005 increment limitation. This also meant that retail traders who can't circumvent this limit are disadvantaged. Eg. I am only able to sell for $0.005 if I chose to close, but the successful trader obtained $0.008 ... a 60% better price than me, the retail trader.
Can anyone shed more light of this? Am I correct in assuming that there are traders who can circumvent the $0.005 increment rule? If so, who are they? And better still, how do I become one?