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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: George McMeen who wrote (2222)	1/6/1998 3:21:00 PM
From: Brendan W	Respond to of 4969

On listed securities Brown usually routes its orders to a MM (e.g., Trimark). The MMs that Brown does business with must mirror the NYSE/ASE so that it's as if your order was there. The MM tracks your position within the specialist's order book. If you would have been due a fill on the NYSE, then you're due it through Brown's MM. This is the theory. In practice you have to watch to see if the MM honors the promise. On Nasdaq limit orders through Brown I have had buys filled at the bid, sells at the ask. I don't know if the orders are placed with a Brown MM or through Selectnet. I do know that Brown can place orders through Selectnet and SOES. I've never asked for price improvement. I don't know what this means in Brown's context. Brown is a subsidiary of Chase Manhattan. They can finance their margin debt through Chase's commercial paper program... hence the low rates.

To: George McMeen who wrote (2222)	1/6/1998 9:21:00 PM
From: steve goldman	Read Replies (1) \| Respond to of 4969

I would be glad to answer ANY question relating to the brokerage industry, how they make money, how they handle certain business...ask away...after all, WE (those at Yamner) don't have anything to hide.... Margin rates: margin interest is a HUGE percentage of most CLEARING firm's business. Forget the $19 or $39 for trades, if you can make 3% on a couple of billion in outstanding debit balances, thats nice. Our clients get charged a rate determined by Pershing, our clearing firm, one of the biggest and best. Its a division of Donaldson Lufkin. To be honest, I have tried to hammer out a definitive answer as to EXACTLy how to calculate margin. It comes down to base lending rate plus a percentage, usually pretty small, plus/or minus a factor they don't have to disclose. For instance, they might reduce the number for a larger debit or increase it for a high concentration in one stock. We make probably less than 1/4 point of any debit interest our clients make but it is still a nice component of our business. Some firms will sell themselves on low interest rates. To me, its like giving a quote services or other crap for free. Noone gives away anything for free. If you get it for free, don't fool yourself, you are paying one way or the other, in an 1/8 here a 1/4 there or more.. Yet if a client with a debit of 100,000 over the year, pays 7% instead of 6 3/4%, the $250 difference 1/4% on the 100,000 is usually made up in better executions, etc., with a firm like ours. Good questions...ask more like this... regards, steve@yamner.com