Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: LPS5 who wrote (7633)	4/3/2000 12:05:00 AM
From: Dan Clark	Read Replies (1) \| Respond to of 18137

LPS5, Your position and arguments sound quite similar to that proposed by the Nasdaq. Are you associated with Nasdaq, ECN or any Market Maker? I can imagine that the ECN's don't want this because it makes their service unnecessary. It turns that CyberCorp has a system very similar to what you propose. It doesn't work very well because of Market Maker antics and/or because it is too slow. By the time the system determines where to send the order, the order price has moved on and your order is not marketable. Also, for your scenario to work, ALL participants would have to be bound by the same rules - instant execution and price improvement. One of the most "anemic" arguments is that this would reduce competition. If by "competition", you mean limiting the role of the Market Makers, then yes you are correct. But if you mean the classic definition of "competition" - better products for lower cost - then the argument doesn't hold water. Trades are a commodity item. It is currently treated as though the Market Makers and big broker/dealers provide added value to the retail investor. The don't really provide added value. If want to buy 100 shares of Microsoft and the current ask is $90, then the purchase price should be $90 per share. The "Product" is the same. The price is the same. But liquidity is spread all over the place. With the CLOB, trades become more commoditized and therefore lower cost. All traders can know that they can go to one place and get the best price. Bottom line is that "competition" doesn't mean more middlemen in the marketplace taking their cut. It means lower costs for the investor/trader. Regards, Dan.