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Technology Stocks : RGFX Raster Graphics

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To: Sam Citron who wrote (162)	8/9/1997 5:26:00 PM
From: Raymond J. Ashe, Jr.	of 593

Sam I'm not an expert on web trading or deep discount operations, but I will tell you what I know about order flow. Many of these very cheap commission houses are subsidaries(case in point the Muriel Siebert commercial that asks do you know who your discount broker really is-) of major clearing firms, others contract with them to supply all the orders they take in from retail to be forwarded to these large firms to be executed. In return they recieve several cents per share for directing the business to these firms. Now is that better or worse for the retail client? I don't know---are you getting executions inside the spread or are you only recieving bids and offers upon execution---only you can say(based upon your own experinces). I know there have been class action suits filed against so called commissionless traders--but I have seen no updates lately on the progress of those suits. Sam there is still no free lunch, in this business or any other--just common sense tells us that everyone is in business to make money--what is fair is of no importance to most business people--what the market will bear is the major consideration. What most people don't consider is the enormous cost of net capital and all the money spent on equipment services benefits and all the multituides of perphial expenses investment firms bear(just like GM doesn't just buy parts put them together and collect the difference between the finished product and the pieces--there are mountains of expenses that have to be spread across every vehicle--r&d, benefits, labor cost' etc etc etc) . Please don't turn this into a debate on what is fair because that question surely is bigger than me (I cant say I could possibly arrive at an answer) Sam one thing to remmember about MM is that they have to assume risk to play in the market game--some of the big stocks MSFT INTC and other really contain much less risk since they can virtually be traded 24 hours a day on off exchange systems. But stocks like this one have no ready buyers when bad news breaks--therfore to hold inventory is much risker--the more risk involved the more cost---therefore the lower the prevailing bids and wider spreads to compensate. Without the MM system the price swings would be more pronounced then they are now and the spreads would be worse. Suppose you think the stock is worth 6.00 and i think its worth 7.00 and we are the only buyers and sellers on a particular day now we have a 1.00 spread--without the competition of MM it would be worse. I agree that the system is far from perfect, but truthfully without it many of the smaller companies would never have come public(so i guess we have a tradeoff). As far as disparing my occupation, don't worry about it--I love this industry and no one will ever change my mind that I'm the luckiest SOB ever born--because I live in free country as a free man and can make a living from the world's greatest industry. So I guess I will get back to work now and look forward to reading some good commentary from you guys on the RASTER's products and prospects.

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