I've been reading this thread for quite some time and I apreciate much of what you and others post. I do happen to think you are undoubtably biased regarding market makers and so forth.
Lets be honest with each other. You know as well as I do that the average small fry that trades 5-10 times per year is NOT getting royally hosed on many of his trades. Particularly if one is half-way knowledglable about trading, the NASDAQ limit order protection rule and so forth. If a stock is $50-50.25 and joe six pack pays the ask for his 100 shares throgh Datek or Suretrade or some other $10 broker he is not getting royally screwed. In fact, he's coming out AHEAD of where he would at good-ole Yamner. Lets assume you can in 1 of 6 cases (as you stated) get price improvement--(I get that in perhaps 1 in 4 without an account at Yamner). So you save Mr. Sixpack an eighth and charge him $35 whereas Datek charges $10 +12.50 (lack of improvement) so in this case Datek beats Yamner by a whopping percentage.
Sure, many times Joe Six pack is buying more than 100 shares. Where is your advantage as opposed to him placing a limit order at or slightly above the bid with the largest market maker in the country ?
Sure, in one of 6 cases perhaps you'd save them a 32nd. To me on an average trade of 1000 shares, even a 1/16 improvement equals about $10 per trade. The average Joe would still be better off with a deep discounter.
What about the guy that buys 10,000 shares ???? Well, in that instance you'd do MUCH better for him if you were indeed a market maker while still retaining some of your often-expressed ethics.
Whats the deal Steve ?? Does one automatically give up any sense of morality or right/wrong as soon as he gets on the block ?? (g)
I'm sorry, for the average Joe Six Pack, assuming he's qualified to make his own investment decisions (If he isnt, he doesnt need Yamner!)
he'd be better off utilizing a quality discounter that goes through MASH or HRZG and paying $12-19 per trade. Yes Mr Goldman, sophisticated investors can know and understand payment for order flow and STILL make a case for using a deep-discounter.
The fact that you dont follow them (wont look into them) doesnt excuse your blanket dismissing them for the educated investor that doesnt need hand-holding.
Payment for order flow is standard practice in the brokerage industry
. The smart investor uses that to his advantage. I promise you Mr Goldman, just because my discounter pays 2 cents a share for my order flow, he does NOT take me to the cleaners for 23 cents a share. Overall, he probably AVERAGES about a penny a share on me though he pays 2 cents. Sure, some poor shmuck picks up my slack but I cant and wont trade worrying about all the retail fools out there.I can live wIth a market maker paying 2 cents to my discounter for my business considering the advantages he offers me. You know...the ones you conviently ignore ?? (g)
Thanks again for all your advice and wisdom...if you could just get past your own self-interest and tell it like it REALLY is, you'd be so much more valuable here.
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