gbh, when a NASDAQ market maker receives a limit order in the spread, for less than 10,000 shares, then they are required to either fill the order or give it market representation.
If XYZ is 9 3/4 x 10 1/4 and I bid 10, the market maker should give me a fill or start bidding 10 to represent my order. Usually they will bid 10, but sometimes they will ignore my order. I can live with a minute delay in representation, but if it goes to five minutes I know that either the order got lost and did not make it to the market maker, or the market maker is violating the SEC rules. If during this time their are many trades at 9 3/4, there is a good chance that the people who sold at 9 3/4 would have been happy to sell to me at 10, had they seen my bid. However, if my bid had been represented, there is no guarantee that I would have gotten the fill. So, my only real complaint can be about violation of SEC rules on representation, but I cannot claim I am due a fill.
The point of my previous post was that when this happens with orders at NDB, NDB will fight on my behalf. They will call up the market maker and start inquiring about what happned to my order after the market maker received it, and why wasn't it represented. I don't know exactly what threats NDB uses, but they always come back with a fill. You're right, Im not entitled to a fill, but I get one at NDB. My personal theory is that the market makers who violate the SEC rules do so quite often, and they'd rather take the loss than draw further attention to themselves. The bottom line is that NDB fights for the customer when things go wrong. Datek gets defensive and fights against the customer. |
