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

To: Tai Jin who wrote (4575)	10/3/1999 2:31:00 AM
From: -	Respond to of 18137

the example you gave of bidding below the ask is no better for ARCA than it is for ISLD That's an interesting notion, I'll do some comparisons this week. I've found ARCA better because you're dealing with market makers (hitting your bid from Selectnet) and they sometimes aren't quite as nimble to see the trend turning back up, while the ISLD traders tend to be playing it the same way I am by then (e.g. buying pullbacks just before they turn up). So with ISLD, often the sellers aren't there to hit your order when the momentum turns up, they are more likely to be bidding too (or starting to take the offer)... always good to re-test past assumptions though, conditions tend to change just in a few months. You're right ARCA is good for getting shorts off... several other good points you make about the behaviour of ARCA. Like your point that ARCA can get hung up waiting for market makers to respond instead of being able to more quickly take the next level up above the offer, even if you enter a limit order to buy say, 1/8 or 1/4 above the offer. ISLD clearly much better there. And by all means, avoid using a market order with ARCA. With all the investment $$ (~$100M) Archipelgo has taken in, perhaps they can improve it a bit :) Nice thought about going outside the market with ISLD... usually when the ISLD's are swarming just above the offer, it's close to time to sell though... but I'll watch that this week. Thanks for a good post. -Steve

To: Tai Jin who wrote (4575)	10/3/1999 1:32:00 PM
From: Matthew L. Jones	Read Replies (2) \| Respond to of 18137

Tai, Island is certainly faster, however, imagine the bail out scenario-- you missed your sell into strength exit on a long trade and it's starting to stall and you just plain want out. 1) ISLD below the inside bid IS NOT how you want to get out because (at least on my system) the trade will be rejected because I would be crossing the market. 2) If your system allowed it, only the stupidist traders are going to leave their ISLD bid out on a dropping stock. So you will have to go many levels down or not at all to get out on ISLD. 3) The same would be true with all other ECNS. 4) ARCA alone gives the ability to (with one click) access the best MM's, and ECN's and get you the heck out before you lose your shirt. ARCA allows me to cross the market as well. 5) Just as every square is a rectangle but every rectangle is not a square, ARCA can get you filled on ISLD, but ISLD cannot get you an ARCA fill. I agree that ISLD is faster and gives you immediate response IF there are buyers in the ISLD book for the number of shares you are offering, however ISLD is getting worse and worse for partial fills, multiple tickets, etc. The reason ARCA takes longer is that it is doing a LOT more work behind the scenes. Matt