SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : From the Trading Desk
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Stacy Holmes who wrote (1856)12/2/1997 5:17:00 PM
From: ams  Read Replies (1) of 4969
 
Stacy,
"Am I correct in assuming that most or all these represent "payment for order flow" and are they listed on level 2."

Yes, ALL trades done "over the counter" of listed stocks is done through MMs in the Third Market. NMS is not technically correct, it should say "third market" or "over the counter". NMS means National Market System and should be used to refer to top tier NASDAQ stocks.

No, they are not listed on level 2. L2 is solely for NASDAQ stocks.

It is generally a good idea to avoid brokers that sell your order to the "third market." Brokers that charge less than $35-$40 per 1000 shares (NYSE) cannot make money on your trade because the specialist charges a fee to your broker for booking your order. They charge more for limit orders than market orders.
Going to the floor of the exchange gurantees you will get the best possible price at that time. Going to the third market guarantees you will get the worst possible price the MM can get away with. The only time where there is no difference is when the particular stock is not moving at all and there is no new interest in the stock (bid/ask stagnant) and you put in a market order. Whether it be NYSE or "third market", you are likely to be filled at the ask for a buy and bid for sell. Paying an extra $20-40 per trade is worth the 1/8 or a 1/4 point. Trading with discount brokers is for the birds. People are getting ripped off and they don't even know it. It's a shame.

Good Trading
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News