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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Sam Sara who wrote (880)	6/17/1999 12:30:00 AM
From: -	Read Replies (2) \| Respond to of 18137

<re: order types for web-broker traders> DavidV, A few comments/answers, I am sure others on this thread will share knowledge too. When you place a market order through Datek, even though they "own" ISLD, it won't necessarily be filled there, although you may get "price improvement" because your market order will probably (may) be "seen" by the ISLD traders first, maybe by a few hundred milliseconds. In addition to ISLD, Datek will also route (present) your order to the NASDAQ system, so you could be filled any one of a number of ways. But, I would caution that to use a market order, especially near the open, is almost like saying "take my money, please!". Limit orders come with their own problems, though. The limit orders fill slower, market orders are filled first (they LIKE market orders - hey, look we've got a live one!...). When you entrust your orders to a "brokerage" (generally defined as a firm that is paid by market makers for order flow), you will have to "get in line" with a limit order, unless you have direct access software. They don't like them - there isn't as much "free money" built in, for them. On the other hand, if you use a direct access brokerage (MB Trading, RML, etc.) there is really no penalty for protecting yourself with limit orders; e.g. all of my orders are limit orders (usually, I'm using them to get filled across the spread, not so much for concern about market orders). However, there are several prices to be paid for using direct access - complexity, etc. (another topic). In general, "market orders" especially on the open are a really bad idea! However, they do have their place - I've even used them in trading the S&P Futures contract. Consider as an alternative, when getting in near the open, a stop limit order, e.g. buy Cisco 110 1/2 stop, limit 110 7/8 ... not everyone will take them, but they put a "box" on your entry price to avoid getting hit with gap-up fills, etc. Good trading, -Steve