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

To: OZ who wrote (8278)	5/5/2000 3:38:00 PM
From: Eric P	Read Replies (2) \| Respond to of 18137

This is not true if you place a Subscriber Only ISLD order. Perhaps an example will better express my point. Let's assume that you want to buy 1000 shares of Hot Internet Stock (Ticker: HOTT). A quick review of your level II display indicates the following offers: NITE....68 1/2......1 ISLD....68 1/2......6 INCA....68 3/4......2 HRZG....69..........1 After recognizing that NITE seems to be just sitting on the offer and not filling any size, you decide to send an marketable limit order to ISLD to buy 1000 shares of HOTT at a price of 68 1/2. Assuming you place a 'normal' ISLD order, you will instantly get filled for 600 shares at 68 1/2 and your remaining 400 shares will be immediately canceled as it would lock the market with the current inside ask of NITE at 68 1/2. For those not familiar, see #reply-9979945 for more on locking/crossing. On the other hand, if you place a 'Subscriber Only' ISLD order, you will instantly get filled for 600 shares at 68 1/2 and your remaining 400 shares will be posted on the ISLD book. Since it is a 'Subscriber Only' order, it will never be forwarded to Nasdaq to be displayed on Level II and therefore will not violate the lock/cross rule. In this way, your order will remain alive and is able to be filled against the first ISLD offer that comes in to join NITE on the offer. I hope this is more clear. Good luck, -Eric