ECN Bogus Bids and offers, Manipulation BY MMs Message Board

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Non-Tech : ECN Bogus Bids and offers, Manipulation BY MMs

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To: wanmore who wrote (20)	7/19/1999 1:40:00 AM
From: Anthony@Pacific	Read Replies (2) of 112

By decreasing the share liability to 100 shares from 1000 the NASDAQ had now guaranteed VOLATILITY AND illiquidity.. Lets say there are 4 MMs on the offer,, You want to buy 2000 shares,,, In the past you knew you could do it at that offer price no problem because each firm was good for a minimum of 1000 shares,, so 4,000 shares is availablke at that second regardles sof if the stock is in inventory or not now the MM is financially committed to honor that price .... But now if you want to buy 2000 shares and thes same 4 MMs are there you are lucky to get 400 done at that level and the rest might be bought at 3 points higher simply because the NASDAQ eliminated the excess spread rule..all of these rules came about only in the last 1 1/2 years , and after the SEC found NASDAQ failed to control its memebers from acting fairly..these new rules gave them the loophole of the spread tightening and the Big Stocks trading in 1/16ths instaed of eighths .. That lawsuit by the SEC was inteneded to tightenthe spreads on stocks but it has dfone the opposite we now have spreads that are two or three times wider than ever before.

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