Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: gene_the_mm who wrote (612)	8/18/2000 1:25:46 AM
From: Simon Thornington	Read Replies (1) \| Respond to of 1426

First off, I appreciate this thread getting back to its roots, if something like that can be said about something so recent! Thank you, Gene, and contributors. Second; the SuperSOES system is (as I understand it) designed to reduce dual-liability situations as simultaneous SelectNet and SOES orders can collide. There are many other factors now, and the ECNs are scared because their proprietary order-routing technology (hats off to ARCA, they rock) is going to be subsumed by economically-forced compliance with new NASDAQ rules. NASDAQ's MM system (sorry Gene) seems to be being threatened by the growing liquidity of certain ECNs, and it doesn't take much imagination to see how this could end up. I believe market makers have a place in the system, and I don't think a legion of daytraders will help liquidity in a real collapse situation. On the other hand, the pay that the market makers accepted for assuming the risk of liability trades is being digested by the daytraders themselves (via the ECNs). I think SuperSOES, if implemented correctly, will be in the best interest of retail customers, and it won't harm MMs enough to cause them to drop out of the game. That is the balance NASDAQ must strike. Furthermore, the needs of the "big clients" must always come first; Heaven help me the day I want to dump a hundred thousand shares. I certainly wouldn't want to have to advertise that to millions of yokels, fairness be damned. I think they have a right to conceal their actions within the limits of the law, and it's my job (as an independent trader) to do the best I can to try and figure out what they're up to. For me, that's part of what makes it fun anyways. Needless volatility means inefficiency, which means profits for the astute. The goal should be to sell the last 1000 shares to the 100K order, through foresight. Good trading, all, Simon.

To: gene_the_mm who wrote (612)	8/18/2000 11:29:27 AM
From: Dominick	Read Replies (4) \| Respond to of 1426

A question: On CNBC during the day they periodically talk with head traders from various firms. In the back ground I can see the other traders at their stations. My question is, why aren't there any old people? :) You would think that once you know how to read the tape, the longer you do it, the better you get! Thanks, Dominick

To: gene_the_mm who wrote (612)	8/18/2000 9:27:17 PM
From: Investor2	Read Replies (2) \| Respond to of 1426

Hi Gene. One of my brokers publishes a list of recommended stocks. There is a footnote for some of the stocks which reads something like, "BrokerName makes a market in stock XYZ." 1. Does that mean the broker has a "gene_the_mm" who trades in the stock in the same manner that you do? 2. Is my broker's recommendation of a stock for which they make a market a conflict of interest? Can the recommendation be trusted? Best wishes, I2

To: gene_the_mm who wrote (612)	8/18/2000 10:59:05 PM
From: Janice Shell	Read Replies (1) \| Respond to of 1426

What will happen is that a large firm or institution will put in their order to buy 500,000 shares (although one point being argued is the MAXIMUM SOES order size allowed - currently suggested to be 99,999 shares) with an upper limit of say, $3 from that price. BOOM! According to what the institutions want (no time delay after execution) the entire MM book would be 'swept' level after level after level until the entire order was filled up to the limit price... And you say this will be "slightly biased" in the favor of institutions or other big buyers? You're a master of understatement, Gene. But...let's take your example of a half million shares. What happens NOW if it's given to one MM to work off? What would the end result be? A gain of three bucks, or an even bigger gain? Say you hit with a series of 25K buys... Then what? I suppose that's a stupid question; the effect would depend on the normal trading volume of the stock. Am I just too sleepy to make sense, or wouldn't this have the greatest effect on stocks that normally trade LESS than the maximum allowable under the SUPERSOES rules, but at the same time DO do decent volume? If they're extremely illiquid, well, who cares, really? Illiquid stocks move on anything, and why should an institution want to pick up 500K in the first place? So: why not base the cap on these transactions on average volume? Oh hell. I think I've probably said a lot of really dumb things in a row. Where's Chickie when you need him?