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Non-Tech : MB TRADING
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To: AHM who wrote (482)7/12/1998 1:37:00 PM
From: Sword  Read Replies (1) of 7382
 
With all of the limitations of ARCA, it is still a wonderful execution tool. I think it only fair to mention some of those in the context of the previous posts.

You can use it as a "monster key". Suppose you have stock XYZ indicating 10 x10 1/8. It is beginning to run up and you want to get on. There are no ISLD offers in sight. What to do? The quantity you want to buy is 2000 shares and the MMs are making markets in 300 to 500 share blocks. A SOES order would probably not execute since the run has started. You don't have time to find out who the best MM is to preference a Selectnet order. ARCA to the rescue. Put in an order for all 2000 shares at what you consider to be a fair price but not too high...maybe 10 3/8 (monster key order). ARCA has a table of the "best" MMs that it uses to select a preference and places the order. Only that MM can see it. It will be executed at the best inside offer and no higher. Of course, that may mean that you get 500 shares at 1/8, 1000 shares at 3/16 and the last 500 at 1/4 as the stock runs up. Or maybe you'll get all of them at 1/8. But you're in and you don't have to chase the stock with multiple bids and higher commissions.

In general, ISLD is preferred for lighting fast executions. But if there are no offers and you hate partial executions, ARCA is an excellent choice.

-Sword
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