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Non-Tech : Meet Gene, a NASDAQ Market Maker
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To: gene_the_mm who wrote (612)8/18/2000 10:59:05 PM
From: Janice Shell  Read Replies (1) of 1426
 
What will happen is that a large firm or institution will put in their order to buy 500,000 shares (although one point being argued is the MAXIMUM SOES order size allowed - currently suggested to be 99,999 shares) with an upper limit of say, $3 from that price. BOOM! According to what the institutions want (no time delay after execution) the entire MM book would be 'swept' level after level after level until the entire order was filled up to the limit price...

And you say this will be "slightly biased" in the favor of institutions or other big buyers?

You're a master of understatement, Gene.

But...let's take your example of a half million shares. What happens NOW if it's given to one MM to work off? What would the end result be? A gain of three bucks, or an even bigger gain? Say you hit with a series of 25K buys... Then what? I suppose that's a stupid question; the effect would depend on the normal trading volume of the stock.

Am I just too sleepy to make sense, or wouldn't this have the greatest effect on stocks that normally trade LESS than the maximum allowable under the SUPERSOES rules, but at the same time DO do decent volume? If they're extremely illiquid, well, who cares, really? Illiquid stocks move on anything, and why should an institution want to pick up 500K in the first place?

So: why not base the cap on these transactions on average volume?

Oh hell. I think I've probably said a lot of really dumb things in a row.

Where's Chickie when you need him?
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