A couple of points on executions. If you step back from all the details of various execution routes and look at the bigger picture of a trade, the most significant element in getting good fills is timing, not routes. I you are trying to buy the bottom on a pullback, it is extremely critical at what point in the pullback you pull the trigger. In a fast market, where the bottom is very choppy and volatile, ARCA is a great tool for getting filled because it keeps you live as long as you want to be or until you are filled. I have consistently gotten great fills via ARCA in this type of situation. ISLD is useless in such a situation because it will cross/lock cancel you instantly. Traders who like to watch the bottom firm up and see a few buys go off put themselves in increasing pressure to get filled. When everybody and their cousin can see the trade is about to bounce, the sellers pull out fast. The tip off I watch for is when ISLD deserts the inside ask. When I see ISLD sitting three ticks up, I expect my fill to be tougher. At this point, I still consider ARCA if I think there are shakey hands (especially ECNs) at the ask. If there are still sellers around, an ARCA bid will still get filled fairly fast. If you go on display with ARCA and don't get filled, it is a good idea to cancel right away to eliminate the 30 sec option that ARCA is giving to some MM. You can then reenter with ARCA and try for a quick fill. Another good option in a stalled bottom is SOES. I am amazed by all the negative commentary on SOES that I see in chat rooms. I get full fills with SOES most of the time. Again, timing is critical. My favorite SOES ploy is a bottom situation where I know one MM has been selling the heck of the stock and trying to short it it. I will wait till everyone else has pulled off the ask and the bid is obviously building. At this point, SOES is the only way to go. Lots of times I get a nice fill just as the MM gets blown off the ask by buying pressure and the stock starts to run. Yippee!
On ARCA being displayed, this can be useful in certain situations. Again, in a stalled bottomed where the decisive up tick has not gone but the markets are moving up, I will sometimes bid with ARCA for two reasons: I am pretty sure I can still get a fill (if I am going to set a new inside bid); and displaying a new inside bid with ARCA is often the very thing that will get the ball rolling and start the run. Chippies may be small timers, but it is astounding how often one little chippie with a 200 share order can stop a run or start one. All psychology, of course, but then that's the whole game, isn't it?
RickF |
