Alex,
In responds to this and to your previous post: End users do not typically see the orders listed in Island, except for level II users who get to see the best bid and ask. However, it is possible for a broker with an interface to Island to get that data, and it can be optionally displayed on at least one system I know of (ATTAIN). There is also a web site that displays the internals of the Island limit book (if you are Java enabled) and a thread on SI if you are interested.
isld.com
Subject 17451
The ECNs do appear on level II at the best bid and ask for that ECN, regardless of whether they are at the inside market or further down the list. The sudden appearance of ECNs at the inside market is, I believe, a side effect of the online brokers using ECNs to place limit orders for customers who only see level I NASDAQ quotes. For example, as a Datek Online customer, if I see a stock with a bid/ask of say 20 by 20 1/4, and I don't want to pay 20 1/4, I can submit an offer of 20 1/8, Datek will put my order into Island, and suddenly there is ISLD all alone at the inside market on level II at 20 1/8.
Until this week, an ECN alone at the inside market was disruptive to SOES because any SOES order place while there was no (SOES eligible) market maker at the inside market was instantly tossed out. As of Monday, NASDAQ changed the rules to keep the order in the queue until the ECN order got executed, or a MM moved to match the inside price of the ECN so he could get SOESed.
nasdaqtrader.com
Dan |
