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

To: Eric P who wrote (8000)	4/25/2000 8:42:00 PM
From: Dan Clark	Read Replies (3) \| Respond to of 18137

Eric, Speaking of great posts... This is an EXCELLENT explanation for us simple, god-fearin' daytraders. <g> It also brings up an interesting question about the future role of direct-entry firms like CyberCorp and MBTrading. If we can simply "SuperSOES" an order and get good fills, will we need complex order routing options like those offered by these firms? Any thoughts? Regards, Dan.

To: Eric P who wrote (8000)	4/28/2000 10:16:00 AM
From: TFF	Read Replies (1) \| Respond to of 18137

Eric, Great post. It's gonna be real interesting to see if the ECN's are willing to be soesable. One would assume that if one ECN blinks the rest will follow.

To: Eric P who wrote (8000)	4/30/2000 12:54:00 PM
From: Threei	Read Replies (1) \| Respond to of 18137

I wanted to take some time to ponder about new execution rules, and thread moved so far during these 5 days that I had to dig out this post :) Well, here are new rules that we were waiting for, discussing... It looks pretty close to what we considered ideal. Let me say right from the start that overall I like it and consider changes to be fair. All I say further is attempt to analyse in advance problems we can face (let's aknowledge the fact that nothing comes for free). So, from the moment new set of rules is in effect, it's not a problem anymore HOW to send the order(well, to certain degree). There are 2 things that should be considered: 1. Amount of shares available at any given price still remains the same. 2. This amount of shares will be exhausted more quickly because of decreased time period between fills and because of immediate executions against reserve size. It means that prices are going to change faster. Risk is going to be perceived as increased. It might lead to even less liquidity as market participants might want to decrease their risk exposure. Next thing that gets me worried: as executions become easier old style scalpers (something similar to what we knew once as SOES bandits) might appear on the scene again. Not that I have something against them but I don't believe their presence will be tolerated by MMs, which means new tricks will be applied to cut them off. And it is going to affect all of us, just like changing of old SOES did, regardless of who was using SOES as their primary route. Being used to constant adjusting, I am still not too excited about whole new bag of tricks to learn. Well, brave new world is coming anyway, let's try and foresee some of what it brings? Vadym

To: Eric P who wrote (8000)	5/3/2000 6:06:00 AM
From: Redmond Quain	Read Replies (1) \| Respond to of 18137

In Eric P.s excellent post re SuperSOES (Reply#8000)we find the following: 6) Another interesting change is that, under most cicumumstances, market maker orders on the new system will immediately be removed from the inside bid/ask once their displayed and reserve size has been exhausted. This is a major improvement, as market makers will no longer be capable of halting a move in the market by merely filling one 100 share order every 17 seconds and refusing to back away from the inside market. For example, assume that the inside bid is 82 1/2, and there are three market makers displaying sizes of 300, 500 and 400 shares respectively. If you place a market SOES order for 1200 shares, you will 'take out' all three of the market makers and their quotes will immediately be eliminated from the Level II display and the inside bid will drop to the next highest level. The market maker will then have up to 5 minutes to post a new quote for the stock to replace the one that was 'taken out'. This is exactly what many of us have been suggesting as a 'fair' solution for a long time. Hopefully, it will work in practice as well as it seems like it should.>> I don't understand the following extract: <<The market maker will then have up to 5 minutes to post a new quote for the stock to replace the one that was 'taken out'.>> Is the MM given some sort of priority? What significance is there to this for the person wishing to place an order on the system? Could someone explain?