Interesting article, Curtis. It seems to me that it is a blatant admission by Schwab that market makers rule, and even the 'big boys' can't play in their sandbox.
If the Naz were run as an HONEST electronic exchange, Schwab's policies wouldn't be needed. But, what's happening is that the MMs are not reporting prices as they happen, are delaying trades, and sometimes are simply not representing some orders. Traders are being ripped off, plain and simple, and if the 'big boys' can't exert any influence on the dishonest practices, the Naz is being turned over to the sharks.
With these wild internet stocks, I think what's happening is that MMs aren't always in between buyers and sellers; if you put in a buy order, the MM may not have a seller, but he can go short to give you your stock. Now, if the price jumps by 50 bucks, he's in trouble, and if some broker is routing all orders for that stock to him exclusively, he's going to use that order flow to get his money back.
I'm no expert on all this, but that's sure what it looks like from where I sit.
jim |
