To: t2 who wrote (25744 ) 7/8/1999 7:05:00 PM From: Sir Francis Drake Read Replies (3) | Respond to
<OT>t2K - as you know both are ECNs, but INCA is primarely used by institutions, often in a very deceptive way (for example you'll see GSCO pretend to be sitting on the buy side - often not on the very inside but just under, and on the ask, they are several levels behind. So, you'd think, wow, Goldman Sachs, who control a lot of trading in MSFT, are buyers, not sellers today! Except, they are funnelling huge sell orders through INCA! They know traders watch them, so they use these tricks to hold the price up, while they unload). ISLD is used mostly by individual traders. There has been a nasty trend that is accellerating as far as I can see - of MMs using ISLD to deceive traders. INCA often "flashes", and does headfakes (they suddenly show up with a HUGE buy/sell order, and quickly withdraw it - they intended to spook or otherwise influence traders) -ISLD used to be blissfully free of this nonsense. In fact I always relied on ISLD to tell me where the "true" buy/sell sentiment was. No more. These days I see flashing on ISLD, particularly on the book (it's hard for them to do it at the inside market price, as they may get hit! So, they leave it a couple of layers behind the best quote on the book - I've seen it in NITE several times the last two trading days). Also, more and more, it seems MMs are hitting ISLD just to break momentum (often atomizing orders in the process). Having said that, ISLD is still the cleanest purest sentiment reader out there. If you watch a lot of stocks, you'll see how the MMs play games back and forth, flashing prices, showing fake shares etc. They may even run the price up or down some, but the moment, REAL buy/sell orders appear (on ISLD), all of a sudden, the market coalesces around the ISLD price - MMs fall right in line, because they know this is the "real thing". So, often the power of ISLD is not so much in how much volume they do, but in the fact that they set the honest price based on real supply/demand - and the MMs etc. fall in line - that is why you so often see ISLD at the inside price - seemingly "running" the show; actually, what is happening, is that they are often the direction givers. By contrast, I liken INCA to the Yahoo boards - where anonymous posters with several monikers flagrantly manipulate, tout and deceive. Frankly, reading INCA is extremely difficult - and not surprising, because there are so many institutional players using it, all with different agendas. Often, I just ignore it, unless I see a very clear pattern - f.ex. the ax is pretending to do one thing, but INCA is telling the real tale on one side. Anyhow, this is just a thumbnail sketch - there is a hell of a lot more to learn, and you will in due course.
