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Non-Tech : MB TRADING
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To: TraderAlan who wrote (1496)10/20/1998 11:26:00 AM
From: Eric P  Read Replies (1) of 7382
 
Alan:

Thanks for the information. I was not familiar with the specifics of the Lock/Cross Rule on Nasdaq.

I do think that the rule is somewhat ridiculous, however, suggesting you "take reasonable steps to avoid locking or crossing the market. An example of a "reasonable step" would be to enter a preferenced SelectNet SM order into the system to execute against the bid or offer that your quote would lock or cross."

Clearly, in fast markets, the market maker that you are locking or crossing is not likely to fill your order. They are only holding their quote for the maximum allowable time before backing away, or filling one more order in a queue of perhaps 10+. It is a stalling or delaying tactic on their part to hold the market down and slow down momentum. Nasdaq's suggestion is equally unacceptable => "If you don't receive a response within 30 seconds of sending the preferenced SelectNet order, you may then display the order in your quote even if that quote will lock or cross the other side."

Unfortunately, 30 seconds can be a lifetime for a daytrader.

Thanks for clearing up the rule for me.

-Eric
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