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Pastimes : ETRADE Sucks! -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (3123)	3/5/2000 4:33:00 AM
From: Dale Baker	Read Replies (1) \| Respond to of 3262

The scenario below happened to me with ETurd and COMS this week when the PALM IPO opened. I shorted at the market when COMS was trading around 109-110. But the short only filled minutes later at 104. Fortunately my buy to cover market order at 93 only executed at 86. But I learned never to give ETurd a market order in a fast moving stock, because the dear folks at NITE will be screwing every ET trader they can find. "Knight promises online brokerage firms that when it gets an order, it will automatically execute it at the best price anywhere, even if it's not Knight's quote. To execute buy orders, for example, the firm buys shares and keeps them briefly in inventory, risking a price decline before it gets rid of them. But Knight takes steps to limit its risk. For example, it chooses whom to trade with. Mr. Pasternak welcomes the "uninformed" orders of thousands of individual investors, because he is confident that, on average, Knight will be smarter than them. And just as a casino bars gamblers who consistently beat the house, Knight's systems watch for investors who consistently make money trading against the firm. For such a customer, Knight may restrict or suspend the promise to automatically execute all trades at the best price posted anywhere. Knight also occasionally suspends this promise during "fast markets." Suppose a mention on CNBC triggers a surge of buying or selling in a stock; Knight can suspend automatic execution after it has accumulated a long or short position of, say, 25,000 shares. Then it switches to manual execution and fills orders only against another customer or another dealer -- a slow process during which the stock may move a lot. Knight tells online brokers when it has restricted automatic execution, but the brokers typically don't notify investors. In a volatile market, an investor may not get his order executed for several minutes.