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To: Eric P who wrote (8608)	1/11/2001 5:09:22 PM
From: LPS5	Read Replies (3) \| Respond to of 12617

Hey Eric, I have to say, unless it's part of a verifiable attempt to engage in a quasi-"tape painting" effort, there's nothing wrong with it at all. Traders require the ability to cancel an order whether it's been on the box for 30 or .5 second(s), given that market changes often occur at what seem like superluminal speeds. For a desk holding a large order - in particular, a large order requiring employment of a VWAP strategy - there might well be bids (or offers) that are displayed and, with a slight change in volume or the quote, are quickly withdrawn. Some institutional desks promise reduced commissions for any trades done outside the VWAP (in the prescribed time basis; at/under for buys, at/over for sales) for buyside customers; a couple of hundred shares in volume can change that number and put your target execution price a few levels above or below the inside in the blink of an eye. Program traders/index arbitrageurs also enter and leave the market quickly to catch momentary, fleeting disparities between cash and futures prices. They perform an important function in the market(s), and I would scarcely deny them the ability to bid/offer and subsequently withdraw such, regardless of the amount of time it was displayed for. In addition, it bears consideration that anyone who flashes a huge bid and genuinely tries to juice the market with no 'trading interest' behind their quote risks getting hit or taken. What it really becomes is a question of intent which is difficult at best to prove. If I can find it, I'd posted a message on this subject rebutting those who called flashing "fraud[ulent]" from a legal point of view. As for misleading retail customers/daytraders...well...if you start wacking offers only because a 100,000 or 1,000,000 share high bid appears... :-/ LPS5

To: Eric P who wrote (8608)	1/11/2001 9:04:12 PM
From: Wayners	Respond to of 12617

Hey if that bid as the inside bid you're right. But when its several levels down and displayed and you have an intent to cancel it just before it gets to the inside bid then I've got a problem with that.

To: Eric P who wrote (8608)	1/11/2001 9:07:15 PM
From: Wayners	Respond to of 12617

Hey if that bid is the inside bid you're right. But when its several levels down and displayed and you have an intent to cancel it just before it gets to the inside bid then I've got a problem with that.

To: Eric P who wrote (8608)	1/11/2001 9:08:42 PM
From: Wayners	Respond to of 12617

Hey if that bid is the inside bid you're right. But when its several levels down and displayed and you have an intent to cancel it just before it gets to the inside bid then I've got a problem with that. Proving intent is impossible unless you tell somebody that you regularly spoof and they turn you in. I've never seen anybody on an SEC list that was punished in any way for the practice.

To: Eric P who wrote (8608)	1/11/2001 9:11:31 PM
From: Wayners	Respond to of 12617

Hey if that bid is the inside bid you're right. But when its several levels down and displayed and you have an intent to cancel it just before it gets to the inside bid then I've got a problem with that. Proving intent is impossible unless you tell somebody that you regularly spoof and they turn you in or its recorded. I've never seen anybody on an SEC list that was punished in any way for the practice.

To: Eric P who wrote (8608)	1/11/2001 9:13:21 PM
From: Wayners	Respond to of 12617

:)

To: Eric P who wrote (8608)	1/11/2001 9:14:21 PM
From: Wayners	Respond to of 12617

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To: Eric P who wrote (8608)	1/11/2001 9:15:07 PM
From: Wayners	Read Replies (1) \| Respond to of 12617

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To: Eric P who wrote (8608)	1/17/2001 11:19:09 AM
From: Cash	Read Replies (1) \| Respond to of 12617

Re: Phantom Bids/Offers - How about the NYSE? Why is the SEC only investigating NASDAQ? The NYSE specialists do this ALL DAY LONG. I've even been on the NYSE floor with a specialist. The quote was 10 x 10. The specialist was short and didn't want to be. He said "let's see if we can scare some stock in, that's me on the bid" and made the quote 10 x 500. A few seconds later, a 10 lot hit the bid, he bought the stock, and changed the quote back to 10 x 10. Moments later, the stock was up a quarter. So again I ask, why just NASDAQ?

To: Eric P who wrote (8608)	1/18/2001 11:47:50 AM
From: TFF	Read Replies (1) \| Respond to of 12617

Pretty common tactic really. Just another example of SEC playing up to the media I susect. Here's an interesting piece on "spoofing". 3) Spoof: Actually, this may be your best bet of all. It's as old as the first market itself and in many ways can still be employed - indeed perhaps best of all - in the good old electronic markets. Even the most opaque of order entry systems tend to give bid and offer data a few ticks apart. If you really want to do one thing, you can always enter something juicy in one side of the order book and then hold back your orders on the side you want to do the business. You do of course run the risk of being taken out...but then again if spoof was a sure fire winner, then everybody would be doing it. Moreover, if you have a smart enough ISV (whoever said "smart ISV" was oxymoronic, go to the back of the class, please), they can provide you with an order feeder system whereby your order which you really want to execute goes in in clips onto the correct side of the market as soon as you see the market coming your way. True, you might find FIFO working against you here but look, if you want million dollars solutions, well send me a cheque for 500,000 up front and I'm sure I can get you a million dollar solution, okay? Anyway, another thing about the order book showing, say 5 ticks around the market is that you can of course show your big "spoof" order away from the actual market itself and hope this has the trick to drive prices your way. appliederivatives.com