Sajjad, I had written more and lost it so let me keep this brief.
1)Market Maker quotes must be firm for the designated soes tier(200-1000shs). Whoever gets to the quote first wins the execution. As I stated before, this is usually a SOES Bandit due to the electronic advantage he has, but a retail customer has the same print entitlemant.
2)Selectnet and Instinet are not markets or quotes, per se, they are arenas for bids and offers for a specific share amount that usually operate between the best dealer bid/offer. These bid and offers are displayed by anyone possessing either system(i.e. hedge funds, dealers, SOES Bandits, etc.) The dealer spread becomes more of a parameter in which to operate. These bids and offers change so rapidly that if they were quoted as a market it would change as quickly as you see prints going across your tape. That would get rather confusing. Consequently, these systems are not currently available to the market as a whole.
3)Look at in this manner. You know that new and used car dealers have access to prices that the general public can rarely get, because they both know their business and provide liquidity to the car makers and individual sellers. They take on some risk in inventory and capital outlay, but are in business to make money. You go to a dealer knowing that he is trying to sell you a car that he purchased for less. You must look at a market maker in the same way. He is in business to make money. His dealer quote represents the MSRP of a car dealer.
4) Instinet activity is strictly anonymous. Even the two sides of the trade aren't aware of each others identity.
5) There is no separate market for funds. Dealers will quote sizeable bids and offers(100,000shs) that may either be inside or outside the dealer spread. Remember, it is still considered a negotiated market. Hence, the car analogy.
Hope this helped. You can help me by letting me know what real-time quote system/service you think is the best. Thanks |
