As a percentage of enterprise value, what is wrong with even larger minimal trading increments? There is no "valuation" resolution on a $1B and up company, that hinges on 1/0000th of a percent measurements in the residual value of the equity. Unless people arey marking to theoretical models purely for derivative purposes and trying to maintain a dynamic hedge with increasingly perfect resolution and without cost.
Larger minimal trading increments increase the cost of speculation, thereby reducing the accuracy of prices. What good reason is there for speculators to pay more for liquidity?
The resolution issue on prices is not clear-cut. Liquidity is good, and I'm happy to have it. But infinite resolution (price, timing) trades do not per-se follow. And they ultimately, themselves, have a feedback loop. INstitutionalized front running (changing examples) is not benign liquidity, for example. Dynamic hedging would at least be a legitimate use, but absence its availability should be priced in accordingly in seperate markets.
