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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: davealex who wrote (8562)	12/30/2000 2:26:28 PM
From: LPS5	Read Replies (1) \| Respond to of 12617

dave, It's not just one person. The primary individual is the specialist, but he or she has a number of assistants at the post. In addition, it's not simply that orders come crashing down and are handled individually; at different price levels, the specialist (with a floor governor nearby, when busy) will quote prices taking into account the floor interest, the DOT orders, and his own capital on an aggregate basis. In other words, he - and a number of assistants, for the most part - don't take 100, 200, 100, 1000 share orders, etc., one-by-one. For the most part, they get orders and prices, and per their judgement, aggregate the size to "clear" a certain bid/offered price level. There's actually a scene in the movie Wall Street where real footage of trading at a post is used to show the trading of the fictional airline stock (there's a good trivia question). You'll see an individual with a notepad addressing the two-buck and floor brokers in the crowd in front of the post, with individuals behind him tapping keypads. The individual discussing a size to clear is the specialist, with his assistants working on other stocks, possibly filling other orders, checking the news, watching the regional quotes via CQS, etc., behind him. The specialist's book looks almost exactly like an ECN book, with sizes indicated at each quoted level PLUS an indication of (a) who the contraparty is; (b) an indication of whether the order is a day, GTC, stop order, etc. It makes sense that they'd also indicate the levels and sizes at which they'd bought and sold stock for easy computation of their average inventory price at a given moment. LPS5