Real tick 3
Following is a seminar given to us last night (Feb 28,
1999) by our member on routing real tick III orders,,,
my deep gratitude to Harry Alexander,,
< TokyoMex > h-man will give us a session on real tick
< h-man > ok lets go
< h-man > If you have any questions during the talk,
pleas join #SA_Sundaynite
< h-man > and post the questions there, I'll copy and
post here and try to answer after
< h-man > the talk will be in this room
< h-man > all right lets go
< h-man > I'd like to talk to you tonite about the
different routes available to you on the naz, when
executing orders.
< h-man > This will be mostly an introductory
discussion but will field all questions best I can
< smeb1 > .
< h-man > the big dif between your web broker and RT or
cyber is that you must choose a route
< h-man > which is a powerful feature, but not so easy
to learn and execute in heat of battle
< h-man > we will review the routs and give some basic
when to when to to guidance
< h-man > you will need l2 screen in 5 min or so,
please start your software
< h-man > I will be talking about the routing options
that I have available to me via realtic and MB Trading,
but the broker and software should not matter
< h-man > OK then
< h-man > When I started this bout a year ago.. the
first question I asked was, is there a single best
route that I can use to get started...
< h-man > the short answer is no
< h-man > u must learn the routes
< h-man > other wise, what is the point and...
< h-man > you may not get filled
< h-man > you need to learn the rules and nuance of
each of the routes, the rules are easy, you can read
them in your manual the nuances ahhh just take time and
experience
< h-man > we'll talk about when some work and when
not... f
ECNs
< h-man > the first thing you need to know is the ECN's
< h-man > you should write them down and paste on your
monitor
< h-man > INCA
< h-man > ISLD
< h-man > BTRD
< h-man > ATTN
< h-man > TNTO
< h-man > BRUT
< h-man > STRK
< h-man > NTRD
< h-man > REDI
< h-man > they are essential to picking the best route
< h-man > as u will see
< h-man > k lets reive each of the choices SOES first
SOES
< h-man > SOES - small order entry system
< h-man > soes can be very fast IF there are mms at
your price
< h-man > some basics
< h-man > SOES executes to MM's only
< h-man > NO ECN's
< h-man > SOES limits # of shares to tier size buy
stock
< h-man > 200 500 or 1000 shares only some l2 services
provide tier size, usually u can tell from l2
< h-man > looking at l2 if predominant are 200 then
that is you probable size
< h-man > size
< h-man > u can also look it up on nasdaqtrader if so
inclined
< h-man > order bigger than tier size gets rejected
immediate so
< h-man > ease enough to find out
< h-man > Nasdaq small caps are not soesable
< h-man > NASDAQ small caps are not soesable
< h-man > sorry
< h-man > upper right on rt3 t or s
< h-man > t = soesable s=smallcap
< h-man > don't ask me why a t ;)
< h-man > other info
< h-man > partials and odd lots OK
< h-man > buy at ask, sell at bid, cant improve the
spread
< h-man > market or limit orders
< h-man > 5 minute rule - cant be on same side of a
trade within 5 minutes
< h-man > can buy and sell immediate but no buy buy or
sell then sell
< h-man > he mm must honor the size they show, so if
they show 1000 and your first, you get in or out
< h-man > however, they do have 15 seconds to refresh
their bid or offer, so if they are refreshing u may not
get filled - this is true with any routing
< h-man > You have no doubt heard the phrase "soes sux"
- someone got a slow or lousy fill
< h-man > most often this happens when the bid is
loaded with eons and you try to execute a SOES order
....
< h-man > u will not get filled
< 'tag' > em sent on the nytimes article http
< h-man > or lots of folks getting out of a thinly
traded stock
< h-man > remember that there must be mm's not ecns,,
showing the size you want to execute soes
< h-man > is a very fast system, can be a parachute to
exit a fast falling stock
< h-man > when u have MMs
< h-man > some stocks like DELL and CSCO soes works
very well
< h-man > if there are a lot of ecns soes is not your
best bet
ISLD
< h-man > next ISLD
< h-man > SLD is ECN run by DATEK
< h-man > just another route but can be lightning quick
when crossing the ISLD book
< h-man > ie if you are selling at 1/8 and someone is
buying your size or better at 1/8
< h-man > instant fill
< h-man > SLD to ISLD is the fastest route you have
available
< h-man > ISLD to ISLD
< pizza > amen to that
< h-man > can buy at bid sell at ask
< h-man > cannot cross the market - unless ISLD at your
price
< h-man > no market orders
< h-man > partial fills a lot
< h-man > and the more than u like odd lot
< h-man > when you are offering or bidding best b/a
< h-man > your order shows on l2 as part of the size on
ISLD
< h-man > if you are outside the best b/a on ISLD you
do not appear on l2
< h-man > ISLD book is avail but is a bit slow
< h-man > www.isld.com I believe
< h-man > when you are bidding/offering
< h-man > on iSLD
< h-man > you may be hit by ARCA or manually executed
by MM using SNET pref
< h-man > or of cours another ISLD'r
< h-man > well talk ARCA And SNET later
< h-man > an advantage of ISLD is very liquid/ widely
used
< h-man > can execute pre/post market
< h-man > provided your broker is connected < h-man >
ISLD works best if you want to buy when everyone is
selling and sell when there is still
< h-man > buying
< h-man > if the market is going against you, you may
not be able to exit
< h-man > via ISLD
< h-man > you need another isldr or some who is willing
to buy from you
< h-man > at the ASK
< h-man > or vice versa covering a short
< h-man > doesn't happen often till the selling
subsides...
< h-man > the toooooo late
< h-man > the=then
< h-man > k
ARCA
< h-man > next ARCA
< h-man > the arCHIPelago
< h-man > you'll here the term chippie
< h-man > a daytrader and now maybe GSCO using arca
< h-man > o one thing ISLD...
< h-man > up to 10k shares I believe
< h-man > k ARCA basics
< h-man > can do limit or market orders
< h-man > I have never done a market ARCA order...
< h-man > I hear it is death...
< h-man > when you see how it works you may understand
why...
< h-man > up to 10k shares
< h-man > round lots (100) only
< h-man > can get filled an odd lot if you hit ISLD'r
that has an odd lot
< h-man > can execute pre/post market again provided
broker connected
< h-man > arca is two different animals depending on if
you want to:
< h-man > buy at bid sell at ask
< h-man > or
< h-man > buy the ask or sell the bid
< h-man > When you buy at the bid, sell ask you appear
as TNTO and ARCHIP on l2
< h-man > all arca orders appear consolidated as TNTO
on best B/A
< h-man > 10 chippies w/100 shares each would result in
TNTO size of 1000
< h-man > when buying the ask selling bid a bit
different
< h-man > archip appears posting what they are willing
to pay / sell
< h-man > if buying the ask, archip appears at the ask
price on the bid side of l2
< h-man > and vise versa for sell
< h-man > (Note that TNTO does not appear at that
price)
< h-man > works this way
< h-man > hits all ECN's first
< h-man > if ECNS at your price - instant fill
< h-man > Crosses it self first (TNTO)
< h-man > (IF there was a chip selling at ask)
< h-man > then posts the order on SelectNet pref to the
most acve mm
< h-man > pref=preferred
< h-man > well talks snet later
< h-man > the mm has 30 seconds to accept or decline
< h-man > if decline your order goes to SNET
< h-man > broadcast
< h-man > all mms see it
< h-man > ARCA good entry/exit when lots of ECNS
< h-man > are at your price
< h-man > it is very fast under these conditions
< h-man > when TNTO to TNTO as fast as ISLD although
confirm a bit slower
< h-man > just the way the sw works
< h-man > still pretty darn fast if hitting other ecns
< h-man > again
< h-man > very fast if ECNS abound
< h-man > slow if not since the mm you pref'd has 30
seconds and SNet execution is optional < h-man >
remember if you see a ton of chips on the b/a, you are
not going to get filled on any rout at that price
< h-man > you need another strategy............
SNET
< h-man > SNET
< h-man > Select Net
< h-man > primarily MM to MM execution
< h-man > up to 10k shares
< h-man > limit orders only
< h-man > can bid/offer any price outside best b/a
< h-man > must pref to hit an ECN
< h-man > oopps
< h-man > SNET can be broadcast or preferred
< h-man > prefer = specify a specific mm or ecn
< h-man > only that mm/ecn sees the order
< h-man > think about that
< h-man > when you have a large order, you may want to
isolate the mms
< h-man > entering several orders one per mm
< h-man > but I digress...
< h-man > SNET is an optional execution system
< h-man > MM do not need to pay attention to it like
SOES
< h-man > but...
< h-man > many have auto exec systems that execute
quick othe
< h-man > wen ever the order is at their price
< h-man > so if you preference an mm who is on auto you
get filled
< h-man > no way to tell when that is the case but that
is what happens
< h-man > SNET can be slow since it is optional
< h-man > often is best exit entry of a fast moving
stock - by prefer an mm below bid for example
< h-man > so every one selling at 1/8 you preference an
mm with your size at 1/s or lower
< h-man > you get out
< h-man > also snet is avail pre and post market for 30
minutes
Examples
< h-man > OK lates take a look at a few stocks
< h-man > lets bring up dell
< h-man > I will discuss routing options and what will
happen given the static environment we see
< h-man > remember that when open the market is fluid
and you are delayed a bit
< h-man > so what u see may not really be there
< h-man > OK lets suppose I want to sell 1000 shares
< h-man > and it is not moving down too fast
< h-man > I would have no problem executing a soes
limit or market order
< h-man > I would get 1/s
< h-man > all of bids are mms
< h-man > and good size
< h-man > if this was pre-market
< h-man > and I wanted out
< h-man > I could SNET preference to INCA
< h-man > at 80 bucks
< h-man > ARCA would work to
< h-man > at 80 pre market
< h-man > but I would snet preference
< h-man > OK lets bring up CSCO
< h-man > lets talk about getting in at ask
< h-man > you options are flexible but lets pretend Iam
TM and I want 5k shares ;)
< h-man > your best bet is ARCA
< h-man > you'll get 3700 immediately
< h-man > from INCA
< h-man > the rest by snet
< h-man > most likely
< h-man > OK lets bring up AMZN
< h-man > last one
< h-man > OK you want out
< h-man > you have 100 shares
< h-man > sorry 1000
< h-man > and ARCA order at 128 is your best bet
< h-man > youl get 700 at 1/8
< h-man > then the best bid is gone
< h-man > and you have 300 left
< h-man > there is a chance that there is ISLD
< h-man > at 128
< h-man > so if so you would get those to other wise
you go to snet and have a good chance at a fill
< h-man > you would get 3 partial fills assuming snet
fills the remaining 300
< h-man > if you routed this sell via ISLD ...
< h-man > and if isld at 128 you get that fill
< h-man > if not...
< h-man > the remainder of the order is canceled and
you still have 900 shares
Questions & Answers
< h-man > k that's it let me look at questions, I'll
copy and post them here
< h-man > < Astro > RT3 Used by executioner or many
brokers ? Kinda confused
< h-man > RealtickIII is software used by many brokers
< h-man > MBT AB Watley X
< h-man > please post in the room I'll get too it
< TokyoMex > Thank you H-Man ,, it was a wonderful
presentation and we are happy to have knowledgeable
member like you on board Societe Anonyem,, let's a
round of applause for fine job ,, and if any one has
questions Tag will post them for you ,, you must post
questions in #SA_Sundaynite,, thanx all for coming ,,
< pizza > clap clapclapclap
< h-man > k
< Sheri > clap clap clap clap
< DirkDigle > clap
< h-man > ty all
< HiSpeed > clap
< IrishBill > Terrific
< TokyoMex > clcp
< TokyoMex > clcp
< The_Crow8 > clap clap
< HiSpeed > calp clap
< TheSlayer > < clap >
< DCarey > clap clap
< johnnie > thanks h-man
< jeeper > clap
< berts > thanks hman
< Setlur > ((((((( applause )))))))
< Tvman > missed it
< Cowboy > Many Many thanks!!!!
< PrecisionTrader > clap
< gato-tom > thanks
< IcyGual > yeah
< chickenlegs > encore... encore...
< books > LEANED A LOT CLAP BARVO HI YAAA
< birdie > clap
< Boulder > nice job
< sabull > clap clap
< heroic > clap clap
< exconn > clapclap
< cousintold > clappppp
< slingshot > clap....clap
< wisc > thunderous applause
< heroic > thanks
< par > clap clap clap
< GBT > THANKS
< dodotrader > clapclap
< Dewave > clap
< The_Crow8 > ame standing ovation
< 'tag' > extremely well done
< h-man > ;-)
< endless_ > Excellent - Vielen Dank
< books > LETS DO IT AGAIN
< h-man > thank you all
< TokyoMex > now taf will post your questions do H _
man can answer them
< DirkDigle > ENCORE!
< HiSpeed > is hman answering Qs here or other room?
< jeeper > standing O
< books > ENCORE
< pesche22 > thks
< h-man > her hispeed
< 'tag' > he is answereing her
< HiSpeed > OK
< h-man > here
< h-man > k next
< 'tag' > but retrieving previous questions from sa
sundaynite
< h-man > yes
< h-man > < The_Toad > what routing is recommended to
fast entry and exit (scalping)?
< h-man > this as you have proably figured out now
< rottyguy > a presentation in this manner really shows
the internet in its infancy. no video or sound for this
< TheSlayer > shhhhhhhhh
< h-man > depends on who is on the stock
< h-man > you must observe the mms and ecns
< h-man > and decide
< h-man > no one answer fits
< h-man > isdl great if isld willing to sell to you but
why would he ?
< DirkDigle > If I want a stock NOW because it is
moving fast, what is the best way to execute at the
best price, in the shortest time?
< h-man > just answered that
< h-man > Could you ask h-man to explain "crossing the
market" as in "you can't cross the market with ISLAND
< h-man > k
< normcap > clap h hman great!!
< h-man > lets look at dell
< TheSlayer > shhhhhhhh
< h-man > if you wanted out and said sell at 80 1/16
you would cross the market
< h-man > your order would be rejected
< h-man > to sell at that price via isld you must have
isld there he is not
< h-man > you would howebver be able to sell 700 at 80
via ISLD since he is there
< h-man > if you sold 1000 700 would execute
< h-man > rest get canceled
< h-man > < mttm > why is there a 5 min rule?
< h-man > < gaming711 > thanks
< h-man > 5 minute rule ?
< h-man > I dunno
< n2growth > Can we talk here yet?
< h-man > there is mucho reference at nasdaqtrader.com
(I think)
< Tvman > 5 min rule is cause mm must pick it up in 5
min or move of the bid
< h-man > that explain all the details of soes
< h-man > < gaming711 > what is difference between
broadcast and preferred
< h-man > Did we answer that ?
< h-man > I 'll assume yes
< h-man > If you get a partial fill with ISLAND do you
have to manually try to sell the balance or is it done
automatically (as in a partial fill with ARCA)?
< h-man > from alan1
< h-man > depends
< h-man > if you end up crossing the market you must re
enter the order with remaining shares
< h-man > if you now become the best b/a
< h-man > ie ISLD was only one on best ba
< h-man > you are now making the market and may get
filled
< maakamil1 > in realtick III, do you customize your
order entry buttons based on each position you are
holding at the time? in other words are you constantly
"tweaking" with order entry buttons?
< n2growth > h-man NASD just approved new rule to
remove the 5 min rule on 2/19/99. Don't know the
effective date yet. FYI.....
< h-man > ty n2
< h-man > there are other reforms coming too
< h-man > < alanl > What are your options to unload the
odd lot shares? (three part question...see above)
< h-man > odd lots can be sold via soes ISLD or SNET,
but...
< h-man > if going snet you need to mark it all or none
< h-man > no rule or restriction or anything
< h-man > just a fact of life that the mm using snet
does not want 117 of anything anymore
< h-man > than u do
< h-man > best stick with isld or soes
< h-man > < alanl > If you have to trade multiple times
to unload odd lot shares, is that multiple commissions
< h-man > yes with MBT
< h-man > I hear Cybertrader is allowing changes for
minimal fee
< h-man > dunno x
< alltrade > thanks h-man...great answers
< h-man > Chip=individual trader using archipelago
< h-man > If I hit a INCA bid or Offer, what are the
extra fees?
< h-man > up to your broker but
< h-man > who cares
< h-man > if you get a better price a teeny
< h-man > that's 60 bucks on 1000 shares
< h-man > < HiSpeed > If I want out of a volatile stock
where it is moving up/down 2-3 points every 30 sec (ex:
EBAY or new IPO) what is best way out? SOES?
< h-man > snet above below b/a usually best but again
< h-man > everything is a situation
< h-man > Using the AMZN ex: if you have 1000 shares
and put in an order to sell using ARCA - would the ISLD
bid take you out? I thought ISLD did not work with
ARCA? correct?
< h-man > ARCA hits ECNS first and fast
< h-man > you get partial 600
< h-man > partial 100 from isld
< h-man > the remainder would appear as tnto at the
best ask
< h-man > assuming you offered at 1/8
< h-man > k some repeat questions as to what is fastest
way out of a stock
< h-man > I hope I have communicated to you all that
there is no one answer
< h-man > Why do some prices go through that are
nowhere near the bid/ask ?
< h-man > not a routing question but I can help
< h-man > there are multiple reasons
< h-man > late post
< h-man > snet order outside
< h-man > cross trades between mms
< h-man > etc
< h-man > h-man, please elaborate on entering several
orders (1 per MM) where you digressed...interesting.
< h-man > from cowboy
< h-man > lets say you want 10000 shares
< h-man > you can choose arca or isld and everybody
sees it
< h-man > or you broadcast snet < h-man > and the mms
see that what do they do...
< h-man > chuk you farley ;-)
< h-man > up goes the ask
< h-man > so a better strategy would be to enter
multiple orders...
< h-man > preference the mms < h-man > at shown prices
< h-man > especially if the ask is thin
< h-man > ie 3k 1/8 5k 3/s
< h-man > and remainder at 1/4
< h-man > if you post a bid for 1/4 you'll get all 10k
at 1/4
< h-man > its is worth multiple commissions for this
but....
< h-man > if you want 10k, are you making a daytrade or
position trade ?
< h-man > you may want to use etrade or what ever
< h-man > just something to thing about
< TokyoMex > well this wraps up out first such a
seminar
< h-man > < h-man > in realtick III, do you customize
your order entry buttons based on each position you are
holding at the time? in other words are you constantly
"tweaking" with order entry buttons?
< TokyoMex > I know you have many questions but its
getting late
< h-man > yes
< TokyoMex > Thank you again
< pizza > more more
< Setlur > thanks h-man!
< TokyoMex > and another round of applause please
< h-man > I'll be around tomorrow
< Cowboy > Muchas Thank yous!
< TokyoMex > clap clap
< n2growth > Thanks TM and h-man....:-)
< Argus > Thanks h-man
< pjd777 > clap
< 'tag' > stopping the log here
< sabull > Thanks!!!!!
< pizza > lighter is flicked on
* Setlur (((((((((( clap clap clap ))))))))
Session Close: Sun Feb 28 19:27:59 1999 |
