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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (4191)	9/20/1999 3:40:00 AM
From: Dan Duchardt	Respond to of 18137

Carl, For some reason, it is easier for the market makers (like MASH) to make the spread than it is for the ISLD.) I believe this is because SOES is reserved exclusively for the MMs to execute retail orders. In spite of the recent changes that have made it less effective than it used to be, SOES is still the easiest way to place a small NASDAQ order. The push of button sends your market or limit order to SOES where it can be executed by any market maker quoting at the inside market. It cannot be executed by an ECN, even if the ECN was there first, or if the ECN has the only quote at the inside. For an ISLDer to buy at the bid, or sell at the ask, someone has to match the ISLD quote by specifically selecting ISLD, excluding all other possible execution paths for that order. I recently started trading an IRA account with Merrill Lynch. My data sample is very small so I can't argue the point too strenuously, but I've had better luck buying at the bid and selling at the ask in this account than I ever had with a direct access system. Why? Simply because my order goes to market by the name MLCO, and it's a SOESable order. The problem is that it takes way too long to enter an order. Assuming ML one day fixes their system so that I can get my order to market in a matter of a few seconds, I believe it will be a better way to make the spread than any direct system out there. They say they have no intention of creating a system for daytrading, but who knows. Dan