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

To: LPS5 who wrote (8303)	5/7/2000 5:02:00 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 18137

LPS5, No, the rule should be as it is: "trade or move." Posting a quote is an act which to a large extent reflects INTEREST, and which - unless hit with a liability-inducing order (SOES, certain limit orders and conditions that Dan mentioned, etc.) - does not, and should not, carry with it the obligation to automatically have to execute a trade without the ability to reject such or move ones' quote. If you are talking about the specific premarket activity of MMs jockeying for position, I'm OK with the notion of expressing interest. But more generally, I respectfully disagree. I am sypathetic to issues of multiple liablility, and agree that an MM posting a quote should have only one obligation to stand behind it. Systems that create multiple liability need to be corrected. I also have no problem with the notion of the "merchants" having a system whereby they can express interest to one another for exchanges of property, provided those statements of interest have no effect on the prices quoted to "consumers". But that is not what we have with published quotes (although there are other mechanisms, such as the good ole phone for doing this). As a consumer in a competitive market place, when I see a published price I have every right to expect that price to be honored if I'm first in line to accept it. Otherwise, I may lose the opportunity to obtain the next best price because of the time wasted going after a false quote. The potential abuse of posting false quotes is enornous. The onus should be on the merchant to assess the market and keep his quotes in line with what he thinks the market will bear. Where does the consumer get to express "interest", and take down an order that has been accepted? When I place my order I am obligated to stand behind it. No "well, that was the price I was willing to pay 10 seconds ago, but things have changed and I'm not interested anymore". Either I'm fast enough to withdraw my order, or I live with it. Dan