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Non-Tech : Knight/Trimark Group, Inc. -- Ignore unavailable to you. Want to Upgrade?

To: gbh who wrote (3886)	9/11/1999 7:21:00 PM
From: Gary Korn	Read Replies (2) \| Respond to of 10027

Gary, Thanks for posting the 10Q information. It makes sense that NITE would take a commission from an institutional customer. (To clarify your comment, NITE doesn't take a fee for all listed securities traded by all persons, it only takes a fee for listed securities traded on behalf of an institutional client). These entities are coming to NITE directly (not going through an OLB) and, therefore, NITE has the extra expense of recordkeeping for these accounts. NITE also takes on the burden of shopping or accumulating what can be hundreds of thousands of shares. Therefore, back to the E-Trades of the world, these brokers don't pay NITE for executions. Rather, they collect commissions from their own "clients" (i.e., Ma and Pa trader) and, in the case of market orders, they collect additional fees from NITE. But NITE pays E-Trade nothing for processing a trade. (I'll still confirm with NITE on Monday). Anyway, that brings us back to the issue that began this research: Why would an OLB want to increase costs by routing limit orders to an ECN? If it does so at the option of its customer, I would think there would be an incentive for the OLB to pass liquidity charges back to its customer, and hence an incentive for the customer to shy away from ECN-type trades. For what it is worth, that is very much like what happened to me when I started to see ECN-liquidity charges on my own ISLD trades (I disliked the added fee and I disliked the partial fills, so I stopped selecting ISLD). As an aside, there was an interesting comment on the YHOO board, to the effect that Ameritrade's CEO would rather borrow money than sell any NITE shares at this level. Whether or not true, I don't know (but it is actually in line with something that someone recently had told me about AMTD's view of NITE's prospects). Gary Korn