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

To: Matthew L. Jones who wrote (4590)	10/3/1999 1:56:00 PM
From: Tai Jin	Read Replies (2) \| Respond to of 18137

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. That shouldn't be the case. As long as there is an ISLD bid at or above your limit price your ISLD sell should execute against it even if it is below the market. Only when there is no ISLD bid to execute against will your order be rejected due to crossing the market. Perhaps this behavior depends on your broker. 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. I guess it's all relative. Many of the stocks I trade are very volatile and less liquid so a few levels down could be a point or more. In these types of stocks I'm much better off taking out the best ISLD bids since the stock is likely to drop several points. Trying to sell to the MMs in these types of stocks will cost you a lot more since they'll just ignore you and drop their bids. Remember there are market orders which take precedence over your ARCA order. 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. True enough, but as I mentioned in an earlier post ARCA only works your order at the inside market without any guarantee of a fill. You could lose your shirt as the rest of the market falls away while your ARCA order is still trying to get a fill with the lone MM who inevitably ignores your order and drops his bid. In these situations there will be lots of market sell orders which take precedence over your order. So depending on the situation, ARCA could actually be the worst possible route. 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. True, but I rarely see anything on the ARCA book anyway. Again this may be dependent on the stocks you trade. So let me just say that in my experience with the stocks I tend to trade ARCA is much inferior to ISLD in almost all cases (except for chasing a short as I mentioned in a previous post). But certainly the partial fills on ISLD are annoying and cost me a lot in commissions. I'm probably going to trade at a broker that charges a per share commission instead. It'll cost me a lot less given that I tend to make many trades of smaller number of shares. ...tai

To: Matthew L. Jones who wrote (4590)	10/4/1999 3:05:00 AM
From: August	Read Replies (3) \| Respond to of 18137

Palo Alto, Eric, Jones, Kimberly, Davies, N2Growth. Thank you all for a lively discussion about what to do what market makers refuse to honor their own ask/bid quotes. This is a serious problem and getting worse. Market makers put up quotes, not intending to honor their own quotes. The purpose of the fake quotes is to manipulate the market, and allow market makers to execute investors orders at a price far inferior to the true market price. For those uninitiated who may happen to come across this post, an example illustrates my point: ____________________________________ ...Market makers (MM's) quote a stock at bid-$154 15/16, ask-$155 ...Because there are huge number of sellers willing to sell at $131 (in addition to those who want to sell at higher price). $131 happens to be where the stock closed the previous day. ...Those people who want to buy at >=$131 could have been easily accommodated by the willing sellers at $131. ...Therefore, the true market price is $131. ...Although the market maker quote prices of bid-$154 15/16, ask-$155, he never intend to buy at bid-$154 15/16, his purpose of putting up his fake quotes was to deceive investors into thinking that the market was at $155, thus allowing the MM to sell/short to the public at $155. Thus, the MM defrauds the buyers of $24 a share. ...The seller who put in order to sell at $155 or even $131 never got their shares sold before the stock started to plunge to $87. Those who put in market orders to sell sold theirs stocks near $87 near the bottom. ...For those who think this is but a figment of my imagination, this is not. This is what happened to CMGI on 1999.1.12 Those who market order to buy at market open bought near $155. Those who market order to sell at market open sold near $87 , the MM claimed to be on "Manual Execution" and could not get to the sell order until half an hour later ...After the price had fallen to 90's and 80's Those who placed market sell orders, sold near $87, of course. Those who placed market buy orders, bought at $130 . Again, the MM claimed to be on "Manual Execution" and could not get to the buy order until 20 minutes later ...Similar outrageous shenanigans happened to many other internet stocks that day, day after Thanksgiving 1998, day before Christmas 1998. ...Similar outrageous shenanigans happened to many other stocks, such as when EntreMed opened gap up on 1998.5.4 to $83, from previous close of $12 1/16 ...Similar shenanigans although less extreme happen to many other stocks all the time. ...I believe MUCH OF NASDAQ VOLATILITIES ARE DUE THESE AND OTHER SHENANINGANS PERPETRATED BY MARKET MAKERS. These market makers got together and form a commission to proclaim that these activities are acceptable. Thus market manipulations, fake quotes, and fraud--crimes by other names are made rule of the land. Much as the Commission founded by Lucky Luciano getting together and proclaiming crimes are acceptable, as long as the crimes has the blessing of the Commission. ------------------------------------ Matt, you said: >>>ARCA alone gives the ability ... [to] get you the heck out before you lose your shirt ... ARCA allows me to cross the market <<< Are you sure you could "cross the market" with ARCA? ...The Nasdaq rules makes it easy to cross the market only for those who do not intend to honor their quotes--i.e. the MM's. ...Those with real firm orders to buy and sell--i.e. the public--are not allowed to "cross the market", even if they desperately want to sell below the MM's fake "best bid" quote , in order to get around the MM fraudulent quotes. ...MM's are not supposed to cross the market except under certain conditions. But MM's break the rule all the time to manipulate the market, and get but a slap on the wrist, at best. ...I think what you are referring to is posting on a ECN a sell below the MM's "best bid" quote. You do not cross the market, because your sell order cannot be broadcasted to the public and become the "best available ask". Only the rare investor who happened to buy through that particular ECN can buy at the lower price you are willing to sell at. Every one else, including those with other ECN's have to pay the higher fake "best available ask" quoted nationally. ...Only a small number public investors have access to this way of getting around MM's fake quotes. Pretty soon, the public will lose even this ability to sell below MM's fake "best available bid" in order to get out. Mr. Levitt and SEC Regulation ATS display requirements is phasing in rules that would disallow this even in a private ECN on a not-broadcasted subscriber-only basis. Message 11050127 This new shenanigan to being carried out under the guise of forcing an ECN to publicly broadcast its best quotes, however, the ECN is still not able to "cross the market". Hence, no more posting sell order below the MM's fake "best available bid". This new rule now applies only to a small number of stocks, but when it's fully phased in, the public will be cut out this last way getting around MM's market manipulation and fake quotes, and Nasdaq volatility will increase.