< I just wonder what is the system that a regular discount broker use to execute the trade... buy/sell COMS, I would get a quote of said bid $29 1/2, ask $29 9/16 >
Depends on what discount broker, if they pay for order flow, if you're placing a market or limit order, ..... For example, if you were selling/buying through Discover Brokerage I think they use NITE. If you entered a limit order to buy COMS at 29 1/2 NITE would show up bidding 29 1/2. If they got hit they'd turn around and print your buy order. That is, someone sells to them at 29 1/2 and then they sell those shares to you at the price you specified. If you wanted to sell at the ask price, 29 9/16, then NITE would offer your shares at that price. If you just entered a market order they'd likely buy (sell) the easiest way; pick off a market maker (MM) at the bid (ask) to sell (buy). For NYSE, there are specialists and you don't have an environment similar to NASDAQ. With NASDAQ you can have many MM's and ECN's (INCA, ISLD, BTRD, TNTO, ATTN, REDI) to buy and sell through. I think if a MM like GSCO wants to buy (sell) discreetly they often will bid (ask) through INCA to remain anonymous. This is likely if they have a large order to fill.
Dave |
