Tom - I basically agree, but it's not only myTrack. I know others have the same complaint with eTrade, and I use Regal (not their online service, I only use live brokers) and have also found occasional-to-frequent poor executions or non-executions on the fast-moving BB stuff. My other account is with a wholesale MM who has only a handful of retail accounts. I've learned from both brokers' explanations what the real problem is: the sheer volume of trading of OTC-BB issues! Many OTC-BB orders have to be called in to the MMs, and the phones frequently ring busy or don't get answered. When my MM gets the other MM on the phone, often there are orders from a minute or two before that are still being processed. And most importantly: many people do not realize what a MM like HRZG or NITE does when the sell or buy order exceeds the default bid or offer "guarantee" (I put it in quotes because MMs may back away from their bids or offers on OTC-BB stocks). For a price under .50, if it's a MM's own bid or offer providing the liquidity (i.e., not an individual investor's order standing behind the MM), as is frequently the case when a stock is moving, the default size is 5,000 shares. For .50-.99, it's 2,500 shares, and for 1.00-9.99, it's 500 shares.
Here's a simplified explanation, not because it's difficult to understand but because I don't feel like typing for an hour <g>. Let's say you put in an order to buy 30,000 shares of a stock offered at .14. Since the order far exceeds the default size, the MM may decide not to immediately sell you 5,000 shares. Of course, if it's not his offer at .14, he'd have to go to the offering MM, who'd fill the minimum and then raise his offer. Your broker's MM might not even get to the other MM in time, if he tried. So he might instead choose to become the high bid, hoping people will sell him the 30,000 shares to sell to you. I see this a couple of times a week on my own orders. If it's a hot stock, by the time he even figures out which of these is likely to be the better strategy, the .14 offer is gone and you may get a "nothing done," or if the MM is honest (and wants to keep your broker happy) you get a late report on the minimum. Make sure you watch the MM lineup, because if your broker's MM's bid is still the high, you may get filled later at what appears to be between the spread at that time, if he's been able to get the shares to sell to you at your limit.
The other thing that is happening, seemingly increasingly often, is small partial executions. The MM might decide to fill you 5,000 out of your 30,000 share order. Either way, it's annoying, but there are so many more people now who have RTQs and are willing to trade OTC-BBs, this is a situation that will not correct itself until the next bear market, when the speculative frenzy in microcap stocks dissipates.
Hope that was clear - my apologies to all who knew all that already, but I figured some didn't. -Eric |
