Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Analytical Surveys (ANLT) computer maps -- Ignore unavailable to you. Want to Upgrade?

To: The ChrisMeister who wrote (1050)	7/27/1999 8:14:00 AM
From: TLWatson59	Respond to of 1157

"Only through a broker?" Yes. Particularly the firm through which you placed your order. "What did you mean by that? Or was it just my referring to the Specialist as a Market Maker? (Isn't the specialist a market maker?) I'm confused..." The specialist is a market maker only when needed to keep the market orderly. Unlike the NASDAQ Market Maker who is almost always your competitor and never your friend. The specialist on the floor of a listed exchange is "obligated" to either supply demand for stock by selling it short or buy stock when offerings are too great for the "floor" market to absorb. Contrast that with the Market Makers OTC who are free to pull bids and offers at will after the last execution they completed and prior to being hit on the bid or ask on the next trade. It may come as a surprise to you but when you've placed that but or sell order, your broker leaves it with a wholesaler, a MM who acts as his broker as well as trading for his own profit, who does not scan the level II screens to see who matches up with your bid or ask unless it suits his interests. When your order is left with a floor specialist, it is his obligation to see that your order is executed in sequence and priority according to not only his bid or offer but even those in the trading crowd around his booth. On the floor of an exchange, time as well as price is a governing factor in determining who is entitled to an execution. This does not hold true, OTC, all the time, except in the case where your sell order is lower than any bid shown on the screen or your buy order price is higher than any offer price shown. In that case you get an execution or the compliance officer at your brokerage firm gets a call and you then get an execution. But then again compared to your vast well of trading knowledge, what do I know.

To: The ChrisMeister who wrote (1050)	7/29/1999 9:38:00 PM
From: TLWatson59	Read Replies (1) \| Respond to of 1157

C: No I did not plant this WSJ story: From the Wall Street Journal, Thursday, July 29, 1999 Headline: " Big Board Slaps Large Fines on 3 of Its 'Specialist" Firms "the New york Stock Exchange has slapped three of its floor "specialist" firms with big penalties for allegedly failing to do their jobs. The penalties announced yesterday, the first of their kind in almost three years, include two of the three largest fines evermeted out against specialists. Specialists are the floor traders assigned to manage the trading of specific stocks on the exchange floor, matching buyers and sellers and using their own capital as necessary to keep price movements fair and orderly. The most extensive penalties were levied against M.J. Meehan & Co. and three of its specialists for allegedly failing on eight separate occassions from October, 1996 to September 1998, to maintain fair and orderly markets in CapMAC Holdings, Inc. Citicorp, Colgate-Palmolive Co., Donaldson,Lufkin & Jenrette, Inc., Eaton Vance Corp. and Unibanco-Uniao de Bancos Brasileiros, SA. On Monday. October 27, 1997, the market tumbled amid the Asian crisis, and the next day Citicorp opened at $113, down $10 from Monday's close. As the market rallied it soared to $127.50 by day's end, leading some to accuse the specialist of setting the opening price too low and failing to curb its rise. On both days the exchange alleged the firm and Mr. McMullin "failed to participate adequately as a dealer against a market trend during certain periods of significant price movement." That's what separates trading on the NASDAQ where MM's are free to bid and offer stock at whatever price they choose as long as they don't conspire with one another to control trading in any specific issue or group of issues. An auction market such as exists on the NYSE, the ASE, the PCE,the MWE and other listed exchanges does not operate as a free for all market as the NASDAQ does. That's why you didn't get the execution you thought you were entitled to.