There have been some recent comments on entering trades in 32nds on Island. I hope that this explanation will clarify some misunderstandings.
Island accepts orders in 32nds regardless of the price of the underlying stock. This is done so that the customer has the opportunity to get the best price possible and to trade within the spread. However, NASDAQ only displays orders in 16ths. This means that if a Datek Online customer places an order in 32nds he may not change the inside price of the stock. Despite this, the customer could still get a fill at his superior price.
Here is an example. If a stock, ABCD, is 15 ¬ by 15 « and a Datek Online customer enters a buy order priced at 15 17/32, the bid price of ABCD will not change. However, if another customer whose orders have access to Island, such as a Datek Online customer, places a marketable order to sell, his/her order will be matched off against the best available bid at 15 17/32. In this case, Island offered a better price than NASDAQ is able to display.
In Caroline Bogart's case, her stop order was entered in 32nds. Due to an oversight we were rounding stop orders up to the nearest 8th. This caused her stop to be erroneously activated. Once this was brought to our attention, we reversed the trade immediately and corrected the problem.
In addition, the New York Stock Exchange and the American Stock Exchange have just changed their rules regarding pricing. You can now enter orders in sixteenths in any NYSE stock. For AMEX stocks the rules are a little more complex. For stocks trading at under $.25, you may enter orders in 32nds, for SPY, you may enter orders in 64ths and for all other stocks, you may enter orders in 16ths. You will see these changes reflected on the Datek Online system at 12 p.m. today.
Another customer asked when we would have checking and options available. We are working hard to both improve our existing services and offer new ones. We hope to offer checking in about one month. Options should probably be ready by the fourth quarter of '97.
Finally, please do not use the phone number mentioned in the Yahoo press release. That is the general Datek Securities Corp. number and your call will only have to be diverted to the customer support number. Please try calling us at (212) 514-7531 or writing to us at support@datek.com.
Jon Normile
Datek Online |
