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Non-Tech : Datek Brokerage $9.95 a trade
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To: Candle stick who wrote (6183)12/5/1997 4:16:00 PM
From: Jack Zahran  Read Replies (1) of 16892
 
>> What is a Market participant?

I asked Nasdaq the same question and they said that in this context, Datek is buying and selling from level 2 represented firms without representing themselves. Kind of behind the scenes. When they send an order through Island then you'll actually see the order represented on Level 2 if it is the best bid or ask. If they however act as a Principal, they are buying the stock ahead of you and then selling it to you. In this scenerio they are allowed to make an additional profit. Notice your Datek Confirmations, they clearly show that Datek can do this. You can, however write a request to Datek on all your Principal trades and have them disclose their mark up or down on the transaction.

The above reason is why companies try not to let their traders know they are Principals and/or MM's themselves. There is a conflict of interest when the firm is trying to get the best price for itself and then sell it to you. Note that Datek keeps claiming that they do not do this. However, I will not be comfortable unless I receive a written and signed letter from them stating this. It would be very hard to take them to task on this issue if they are misrepresenting here, when the confirmations clearly state that they may profit in the capacity of Principal.

The only company I know of that puts it in writing is ABWATLEY with their Ultimate Trader system. But that system is worthwile only to real daytraders who need to work their own trades. If you are a long term investor that does their own DD, then an online discount broker is the way to go. I hope the above helps.

JZ
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