From another thread, i thought might be interesting given recent discussions up here...
Also..did anyone see the article in Individual Investor about a daytrader who openly talked about his failures at daytrading and the 5% success rate he felt the practive offered...thought it was interesting.
Lawrence, you are missing a point. If you put in a limit to buy xyz at 10 and you get a report at 10, you are probably saying "great, I got it at what I wanted it at.." The point is a market makers went into the open market, and got it at 9 7/8, booked it into their inventory a/c at 7/8 and filled you at 10....why didnt' they give it to you at 9 7/8 on a 10 limit? because they are market makers?
Would you ever buy a house through an attorney that took both sides, that is bought it from the seller and was selling the house to you out of his own pocket? NOT A CHANCE! you'd never get a better price, and ifyou did, he got even better. That's what making a market is and yet individuals doing business with firms like DLJ, Schwab are trading in 'house'amounts of money every day with a market maker.
Hey, but you got filled at your limit....
Understand how market makers make their money, understand and consider how anyone could offer to do trades for $5 bucks or OLDE's commissionless trading...they are business people..noone does business for free. .look at their balance sheets, they make tremendous money....on your 1000 shares you think you are paying $19...you are, for sure paying more...
which do you think they want? 19 or the 1/8s on all the 1000 extra shares you trade because you can piggyback them on the $19 ticket?
-Steve@yamner.com |
