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To: gbh who wrote (4071)	9/18/1999 9:16:00 PM
From: pgsachs	Respond to of 10027

Gary, Thanks for your kind words - I'll take any king of positive reinforcement after this week's results. On to your questions. First of all, although I am aware of SelectNet, I have never used it, so I don't claim to knowledgeable. (But why let my ignorance of the facts constrain my answer?) ARCA may be somewhat unique, but not with regard to the point in my example (I think). All market participants (ECNs, market makers, agency brokers, exchanges, etc) are subject to the SEC's OEO, that is Order Execution Obligation rule. They must represent a customer's order if it is better than their best bid or offer, and when executing market orders, they must hit the best bid or offer. Thus if Lattice (State Street's ECN) got a market order to buy 2000 INTC and the best offer was 1500 INTC offered on ARCA, (in my understanding) Lattice would have to either hit ARCA's 1500 offer or get a market maker to match that price. (Lattice does not make markets, to my knowledge.) I believe Arca claims that if you give it a market order to buy 8,000 shares, it will scan the available sources of liquidity and execute the order in the best possible fashion. For example, that 8,000 share order might take the 2,000 offered at the best price on ARCA, 4,000 offered at the same (best) price on NASDAQ, then look to find take the next best 2,000 shares offered, whether it be from ARCA, NASDAQ, Island, Lattice, Instinet, etc.