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

To: E. Davies who wrote (4685)	10/4/1999 11:23:00 PM
From: LPS5	Respond to of 18137

Sure: The reserve feature allows a trader/mm to display a fixed amount of stock and keep the rest "in reserve." If I had 50,000 shares to go, I might set reserve for 5,000 share lots, so each time 5,000 shares were done, another 5,000 would be put up until my 50K was done. Instinet has this capability, and I think Bloomberg Tradebook does too. Also, I've seen some high speed set-ups where one could "peg" a reserve order to the best bid, best offer, or midpoint of the spread at a given time. Market makers do indeed trade on ECN's, but generally stick to the most liquid 3 or 4 of them for marketable limits. Those firms that are affiliated with ECN's will almost always put nonmarketable limit orders in their own ECN. Has to do with being a team player and all. Auto-increment bumps a bid, offer, or the two-sided interdealer quote up one quote increment, as we all know 1/8 or 1/16 these days. Your latter stab at it was right :) LPS5

To: E. Davies who wrote (4685)	10/5/1999 2:52:00 AM
From: Don Pueblo	Respond to of 18137

Do the MM's trade on the ECN's Yes. The "problem" is you don't know who it is and who they are working for. Trying to "figure out" who is trading for whom and against whom and what vehicle they are using is pretty much impossible. The real good guys understand enough of it to make money every day. But if you are not in the same room, which is behind a locked door, and to which nobody else has access, the chances of your finding out exactly what is going on at any given moment with one single firm (let alone 10 or 15) are 0.000000000. If you DO figure it out, go immediately to Goldman Sachs and tell them you would like a job as a trader. I'm serious.