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

To: TraderAlan who wrote (6299)	1/5/2000 10:40:00 PM
From: LPS5	Respond to of 18137

Try it with second tier stocks, after hours, if you have MarketXT, Island, REDI, and Instinet access. Big, juicy inter-ECN/ATS crosses in some of those overlooked stocks. LPS5

To: TraderAlan who wrote (6299)	1/5/2000 10:57:00 PM
From: Dan Duchardt	Respond to of 18137

Alan, Has anyone else been trying ECN arbitrage strategy? I have not actually done it, but the thought has occurred to me. It seems to be getting harder all the time to get a MM to fill a marketable limit order, and market orders are too risky; that is driving people to paying up on the ECNs rather than getting stuck with an unfilled order floating out there. Delayed confirmations on cancelations leave them on the sidelines while the market runs away. It's a common complaint among the online broker users, and there are lot of them. I've noticed lately a sort of ECN herd mentality. Several ECNs at the inside on one side of the market, and all sitting away from the other side. That makes me a bit nervous about where I'm going to go to close a position if I do get a price improved entry. I tend to think the MMs are taking all they want when people are trading around them. But as you say, "if the swing is smaller than the perceived panic". Think I'll give it a try. Dan

To: TraderAlan who wrote (6299)	1/6/2000 1:53:00 AM
From: eric012	Read Replies (1) \| Respond to of 18137

Well, that doesn't exactly qualify as "arbitrage," but yes, it seems to work really well, especially when things are going nuts and a stock is trading all over the place. I can often get fills way below the bid... I use the "ISLD TRICK" to buy in and then I'll offer out well above the offer if the market' still crazy enuf. Seems I get fills 1/16th to 1/2 point outside. HOWEVER: had a trade broken the other day by ISLD... Bastards said the print was "clearly erroneous." I don't think it was, but that's life... But yes, oveall, the "ISLD TRICK" seems to work for me.

To: TraderAlan who wrote (6299)	1/6/2000 6:54:00 AM
From: Eric P	Respond to of 18137

Has anyone else been trying ECN arbitrage strategy? I have tried this in the past and given up on the idea for now. All too frequently, the high flyers with all of the emotion and greed will give you the opportunity to buy a stock for ~1/2+ points below the bid. Unfortunately, this is often the beginning of a 3 point drop in the stock. I'm sure this strategy would be much more effective if you wait until the reversal move was well underway and approaching a support point on the intraday chart. Then you might be able to buy at a significant discount and have good reason to believe your downside risk is limited. Haven't personally tried that yet. -Eric