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Non-Tech : Meet Gene, a NASDAQ Market Maker -- Ignore unavailable to you. Want to Upgrade?

To: gene_the_mm who wrote (66)	7/26/2000 11:15:25 PM
From: jjs_ynot	Read Replies (1) \| Respond to of 1426

Gene, I believe that you are right on the money. I have seen a large number of times where the specialiast/market Maker (the particular form depends on the exchange) back away from the bid on a limit order. FWIW, CBOE seems to be the best of the lot. AMEX and Philly are just plain rigged. A competitive interexchange trading system is planned and MAY help. regards, Dave

To: gene_the_mm who wrote (66)	7/26/2000 11:27:48 PM
From: Susie924	Read Replies (1) \| Respond to of 1426

Gene, Even though I've been doing this for a few years now, I still consider myself a newbie and this might be a dumb question! Here goes: How long can a MM take to cancel or change a trade? Back in February I placed an order to buy a particular BB stock at .55 The order was executed immediately at .055 When I received the e-mail confirmation, I figured it was a mistake and that it would be corrected before the end of the trading day. It wasn't. A few people that I spoke to said that it would never hold up and that it would be corrected within the 3 day settlement period. It still wasn't corrected. I waited until the end of the month and I figured that for sure it would be corrected. Again it still wasn't corrected. At that point I figured that I had gotten the buy of the century! I'm sure you are wondering why I didn't sell at this point. The reason I didn't was because I had been just adding to my position on this particular stock and even if I had sold those particular shares I had plenty more that I was holding. Well, 6 weeks after the trade had gone through, I got a telephone call from my broker telling me that it was a mistake. I had 2 choices: 1) They could cancel the order or 2) I could buy the stock at the original limit price that I had put it in for which was .55 Since the price had dropped considerably, I opted for number 1 and the trade was cancelled. I bitched and moaned for a little while with the broker, but he pretty much told me that I didn't have a leg to stand on. Did I? Can a trade really be cancelled after 6 weeks? Thanks for any help that you can give me on this. It's still eating me up inside!

To: gene_the_mm who wrote (66)	7/27/2000 5:16:24 PM
From: Yogizuna	Respond to of 1426

Gene, I wish to extend my welcome to you also, and hope that you can have a good time here exchanging information back and forth..... I have traded options since 1983, and the stupid games they play are unbelievable at times. Just a few months ago for example, I was trying to buy back some calls after the stock had given me a nice profit, so I put a limit order in at the asking price. Even though the stock did not move, they raised the ask on me, so I said to myself, alright, I'll meet your new asking price, because I want out of the position without being left "naked". The stock price still did not move, but they raised the ask price for the option again! And I have seen stupid games being played like that far too often in the last 18 years, so it's no wonder that many feel uncomfortable trading or dealing with options in any way. Of course, they are only hurting themselves by acting the way they do, and I have tried my best to point this out to them whenever I can, but few listen seriously. It's a shame. Yogi

To: gene_the_mm who wrote (66)	7/27/2000 5:32:00 PM
From: Spark	Read Replies (1) \| Respond to of 1426

Time for the bunch of you to straigthen out or be gone..! OT: SEC Proposes New Rule To Expose MM Activity By Jack Burney Published by OTCNN.com 07/27/2000 07:25 AM CST All the letters and e-mails must have had an effect, because the Securities & Exchange Commission is proposing a new two-part rule that would virtually end Market Maker Manipulation. The rule would (1) Make brokers reveal which market maker they use to execute buy or sell orders for investors, and (2) Force market makers to post monthly reports that expose whether trades are being made at the best available price. Such a rule would subject any attempt at MM manipulation or excessive shorting to the light of public scrutiny, and, in effect, bring an end to the worst of the scourge that has suppressed stock prices, according to their stockholders, since March. The rule could go into effect before year’s end. SEC officials were shocked at the unprecedented deluge of investor complaints that flooded the agency when it asked for comments of a series of vague proposals for rule changes. OTC News Network joined the movement, to report its progress and encourage reform, and hopefully, added to the deluge. To the surprise of investors who despaired that the SEC would ever act, the agency’s regulators came up with a rule that strikes at the heart of MMM. It was vindication of a sort for investors whose complaints were ridiculed by some brokers and traders and paid bashers. The SEC said that in 85% of the trades made, investors do not get the best price. If a trade exceeds the best price by even the smallest increment – 6.25 cents – an investor loses $62.50 on a 1,000-share trade. SEC said it suspects that some brokers may be “selling” their orders to MMs who pay them for the business, instead of routing them to centers where the best price can be obtained. SEC action follows the settlement of a class action lawsuit brought by investors against Charles Schwab, the largest online broker, for failing route buy and sell orders to market makers with the best price, and failing to disclose payments received for the placement of those orders.

To: gene_the_mm who wrote (66)	7/30/2000 11:46:47 AM
From: Janice Shell	Respond to of 1426

I have personally had such atrocious experiences of backing away from options specialists it makes me sick. I understand that options are more complex financial instruments (because of the inherent 'time value') than stocks but what I witnessed several times was not to be believed. lol, I'd really like to introduce the loonies on the MMManip thread to the options specialists. Now THERE are people who can get away with murder. In the first ten minutes of options trading they can do what they damned please. Should you be dumb enough to put in a market order you will be KILLED. Then one day a few years ago they decided they wouldn't accept limit sell orders not entered more than 15 minutes before the close on expiry day (technically on the day before expiry). That, at any rate, was what my broker was told; it didn't happen again, and so may have been a rumor. And what happens in the last ten minutes of trading is frequently very weird indeed, especially if you're trading index options near expiry. Black-Scholes doesn't even begin to come into it, snicker. On one memorable occasion I was even able to BUY BELOW the BID. And I sold at the ask more than once. The most fun would, of course, be to write 'em. I've seen (and even traded) OEX options on expiry day that still had five or six bucks premium left 45 minutes or half an hour to the close. Just IMAGINE the possibilities...

To: gene_the_mm who wrote (66)	7/30/2000 11:58:41 AM
From: Janice Shell	Respond to of 1426

I am almost certain that at least the CBOE has no such electronic delivery and confirmation (correct me if I am wrong...however it won't change my opinion). Don't know the answer to that, but whatever you may think of the options market, the CBOE does have an excellent and extremely informative website. Oh btw: here's the MOST outrageous options story I know of. A couple of years ago I had OEX puts on expiry day. The market was tanking bigtime, and I had no wish to sell until the close. But as things got worse, I began to wonder: what would happen if a circuit breaker was hit, and that resulted, effectively, in the markets closing for the day? It didn't happen, but of course I was curious. What would they do? Just let you sell at the last trade price? Conduct and extraordinary session so people could settle? Wrong!! Careful inspection of that little book they give you when you open an options account reveals that in the situation I described, the exchange would simply DECLARE ALL OPTIONS WITH THAT EXPIRY WORTHLESS. End of story. Now THAT is unbelievable.