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.

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

To: nick nelson who wrote (2301)	1/16/1998 6:51:00 AM
From: steve goldman	Respond to of 4969

RE: Your question: Nasdaq Market Makers: First Part- It is my understanding that once a MM fills an order he/she has 90 seconds in which they MUST report that they have FILLED the order. a) Is this approximately correct? YES...the market maker in the stock or the seller if neither firm is a market maker must print to the tape within 90 seconds. Anything later than that must be printed with an SLD , sold out of sequence, qualifier. Also, imagine how difficult it is, almost impossible to police this. b) Who is the fill reported to - how does the trader know his order has been filled - how soon does the client over the Internet get the fill confirmation? Varies - most online firms get bad reputations for late reporting and being too lose. At our firm, on market orders, I keep clients on the phone and give them reports in seconds. c) Why is there often a delay in getting the CONFIRMED fill out over the Internet to the client by some online brokers? No idea - but imagine if you made the market in the stock or you routed to a market maker. It is totally toyour advantage in holding up confirmation. Not saying this is why they do it, but don't think it doesnt happen. Youwant to buy...stock goes lower, your bought it. stock goes higher, sorry you missed it. Second Part(more important - and can create many problems for the broker and client) a) When an online Internet trader CANCELS(not a CHANGE) an OPEN order - often the broker is very lax in returning a CONFIRMED cancel. A PENDING cancel is returned and can remain PENDING for hours. b) If a MM has 90 seconds to confirm a FILL - why are CANCELS not automatically CONFIRMED cancels if no MM reports back a fill within 90 seconds after receiving the CANCEL? I am sure you can guess the answer that someone very cynical of the online shops, such as myself, might say. I won't burn bridges by headingdown this road. But again, imagine if you made markets and could play with the orders. Would you be rushingback with confirms, cancellations...remember, every 1/8 the customer loses, you win. c) How do traders broadcast a client's CANCEL to all MM's and how is a CANCEL verified? You don't broadcast it. I simply hit a kill button or a cancel/replace button and about 1/2 second later, you are usually out. On listed orders, I hit the kill button or cancel/replace and I have to wait for the specialist to give me an "out". On the nasdaq, soes and selectnet, it takes less than a second usually. So whydoes it take so long for internet clients to get outs from their firms???mmmm? d) It seems like MM's and some brokers want 'their cake and eat it to?' leaving the client hanging so that they are unable to trade for the rest-of-the-day while waiting for cancel CONFIRMATION. You are answering your own questions here. Personally, I don't think that its any great mystery why half the crap that internet online clients face occur. Some will say its because of the volume, whichis true, but its also a result of the natureofthe relationship between a marketmaker/principal/firm that routesto such a entity, and the client. Remember, trading against someone is a zero sum game....if you make an 1/8th, they lose an 1/8th.... regards, steve@yamner.com