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Strategies & Market Trends : The Final Frontier - Online Remote Trading

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To: agent99 who wrote (6858)	3/28/1999 7:28:00 AM
From: Eric P	Read Replies (1) of 12617

I had to laugh when I read the end of the NY Times article: Unlike the NASDAQ market makers they hope to replace, ECNs do not commit any capital to maintain orderly markets in the stocks they trade. While most large, reputable market makers stand ready to buy or sell 1,000 shares of the stocks they trade -- they are required to handle 100-share trades -- ECNs do not. Moreover, according to NASDAQ, the average block of stock available at the best bid or offer on an electronic network last year was only 340 shares. So an investor with more than 340 shares to sell or buy may well have his offer only partly filled. By comparison, the average block available from a market maker was 1,741 shares. This seems outdated. These days, most market makers tend to post 100 share orders. And even so, they frequently 'back away' from your order. If you want to get any real liquidity, you have to go to the ECN's: They often have more size displayed, and they are 'real' => i.e. they do not back away from your order unless another trader beats you to the order. -Eric

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