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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 (281)	7/30/2000 3:59:43 PM
From: LPS5	Respond to of 1426

It's a touchy area, because whereas a pattern of doing so may indicate an attempt to "spook" market participants, hey - a trader may bid large, see something he doesn't like, and yank it. Plain and simple. Also, because a bid can be hit, it's not like there isn't risk taken. Some people see it as tantamount to bluffing in poker, which I generally agree with, though on the other hand, I also feel that when done ad nauseum, should be investigated. For one thing, the widespread availability of reserve order functionality (one might say nearly ubiquitous) to limit ones' exposure can make the practice of flashing a large bid or offer a bit suspect - in my opinion. What I mean is: why, Mr. Trader, are you flashing 100,000 share offers when the ECNs, ATS's, and other trading tools you have let you put up 5,000 shares of exposure at a time, until exhausted or some limit is reached? Could he or she have a good answer? Sure. Could it be a blatant attempt to get others to lean on the stock? Also possible. It all depends upon the order, the patterns involved, and, to some extent, the firms' position and the direction of the stock and its' market at that point in time. Long story short: there are a lot of potential wrinkles to the issue that would require a case-by-case assessment of the facts and circumstances surrounding the activity in question. That's my take on "spoofing." LPS5