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Strategies & Market Trends : The Final Frontier - Online Remote Trading
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To: David Smith who wrote (1886)12/19/1997 12:34:00 AM
From: RADAR )))  Read Replies (2) of 12617
 
Christopher:

>> The same principle applies when I get an order to sell stock from the customer...I will immediately begin selling/shorting the stock out of my own account. When I have sold/shorted the amount
of shares the customer wants to sell, I buy the block from the customer at the BID price in the market for the stock, thus covering my short.<<

Interesting. I never knew your sell orders from customers worked in that manner. I assumed, apparently wrongly, that you either matched buy and sell orders and made your money from the spread, or bought or sold from your existing inventory on hand, moving the price up or down to meet the current market activity. Do I understand it correctly that you actually move the price down with your short selling of the stock so that when you buy back to cover your short, the institution/fund ends up getting a lower price than he would have gotten at the time of placing the original order, and that you make and extra edge of profit over the spread price?

RADAR
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