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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (151912)	1/25/2000 8:17:00 AM
From: Geoff Nunn	Read Replies (1) \| Respond to of 176387

Ian, I have not found Morgan Stanley Dean Witter to be a particularly ethical broker. Last summer I transferred a portion of my account to them (Discover Brokerage at the time). I intend to close this account soon, but have been delaying because of a recent option assignment. Two sore points with me are: 1. Temporarily, I am carrying a substantial debit balance with them. When I send in funds, MSDW delays crediting my margin balance until one day after receiving them. This, in effect, gives them a one day interest free loan. In my experience with two other brokerage firms, funds were credited on the day they were received. 2. The spreads on options as quoted by MSDW don't necessarily represent the prices available. Let's suppose 13 1/8 x 7/8 is the quote. If the option is traded on more than one exchange (e.g. Dell), 13 1/8 is not necessarily the highest bid nor 13 7/8 the lowest offer, available. Where then does 13 1/8x7/8 come from? It represents the prevailing b/a spread on only one of the 4 exchanges. That, at least, is what I have been told by a MSDW broker. Although another exchange may be offering a better quote -- you won't know that because MSDW doesn't volunteer it. In fairness, perhaps MSDW is unable to provide investors with the best spreads electronically because the exchanges aren't linked. MSDW will give you the best prices if you request them, however. On their computer screens their brokers are able to read the b/o spreads on each of the 4 exchanges. Here's my problem. MSDW knows the quotes they provide aren't necessarily the best prices available. If you ask them to look for a better quote, they will -- and it takes only a few seconds. However, assuming you find a better price, there is an added fee of $25 to reroute your order. (Apparently the $25 is usually waived, however!) There doesn't seem to be any added cost to rerouting. The one time I requested it, the order was transmitted immediately. If it is not more costly, why is MSDW reluctant to reroute? It is my impression that it is because MSDW receives payment for order flow (i.e, rebates) from their preferred MM. This is a common, if somewhat tawry, practice in the brokerage industry and MSDW doesn't deserve to be singled out. Nonetheless, I believe MSDW has an ethical obligation to warn its investors that they won't necessarily receive the best execution with MSDW's normal routing mechanism, and that they may do better by rerouting even though it (may) cost an extra $25. Just my $.02.

To: Ian@SI who wrote (151912)	1/25/2000 8:30:00 AM
From: GVTucker	Read Replies (1) \| Respond to of 176387

Ian, RE: Morgan Stanley's manipulation Think about it from my point of view. Morgan Stanley was fined for trying to manipulate the price of 9 stocks on 2 separate occasions for less than a minute each time. What's more, most of the time they failed. If Morgan Stanley can't manipulate the price of DELL for more than a few seconds at the open on an options expiration, the odds are pretty close to zero that anybody else can manipulate the price over a longer period of time (say, 5 minutes), much less the hours or days that are speculated on this thread. There is no question that there are a lot of scumbags out there that are trying to do nefarious things with pricing to try and influence a stock's price. There is also no question in my mind that when it comes to a large cap, high liquidity stock like DELL, the scumbags' efforts are fruitless.

To: Ian@SI who wrote (151912)	1/25/2000 11:07:00 AM
From: LemurHouse	Respond to of 176387

This is the sort of thing that shows how laughably inadequate the NASD (and NYSE) is at self-regulation. Note that the case in question was in 1995 -- five years ago. And the individuals were fined a whopping $2,500 each! Is this amount a credible deterrent? Of course not. Sanctions on both the companies and the individuals need to hurt a lot more than this if they are to have any respect at all. If there was actual wrong-doing, then the NASD should impose fines that hurt the culprits, and/or suspend licenses. But can/will self-regulating institutions ever really do this? Doubtful. This case would not seem atypical, and has the appearance of simple window dressing -- political theater which ultimately protects the cozy status quo. The SEC and US Justice Department are unlikely saviors. I think our best hope is for electronic trading to force a continal opening of the markets and tearing down of the NASD (and more especially the NYSE's) semi-monopolistic positions in the industry. The MM's and the NYSE have historically added value and performed necessary functions in the market. But while technology is making much of their function increasingly less relevant, they naturally cling to whatever advantage they can in order to continue to reap the huge revenues that they derive by handling the regular market traffic (never mind actual market manipulation.) The advent of electronic trading, the ECNs etc are changing the landscape, however. If the traditional market makers and the exchanges can't provide a legitimate function and add value for the investor then the market at large will eventually find a way around them. That wasn't possible before, but now we have enabling techology. The writing seems to be on the wall. Hopefully we are moving towards the day when there will be a more transparent and more efficient market, and where there will be less of an opportunity for market makers etc. to artificially insert themselves into every transaction. Sorry for the rant. I'm not one of the conspiracy theorists who believe that DELL is being manipulated. But certainly manipulation exists, esp with options. LOL. Jeez, I must need a vacation. Cheers.