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Technology Stocks : Ascend Communications (ASND)
ASND 209.11-1.7%Dec 26 3:59 PM EST
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To: Jan Crawley who wrote (38737)3/11/1998 7:58:00 AM
From: Glenn D. Rudolph  Read Replies (1) of 61433
 
Glenn,

Why 2.5 times?

Thanks, Jan

Jan,

The NASDAQ does not use specialists as you know as does the NYSE. There are a variety of market makers for each security as you can see from Gary's level II posts. The obvious is the NASDAQ counts the shares sold to the market maker as volume and then the same shares bought from the market maker as volume. That explains the two times you indicated. The additional volume is the trading of shares between market makers. Each market maker can see the number of shares the other market maker has on the bid and ask size. Let's say the market maker at DLJ gets an order for 20,000 shares of Ascend. However he is not holding that many. He does see the GS market maker has shares to sell. He emails the GS market maker and as a professional courtesy the GS market maker will sell his shares to the DLJ market marker between the bid and the ask. That is why you will occasionally see a post of 34 x/64ths. These are counted as volume too.

Glenn
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