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

To: Jay Morrison who wrote (2380)	1/21/1998 3:30:00 AM
From: Scott Moore	Respond to of 4969

Thanks for the info. I didn't realize that you would breakup a 100k order into 100 1k increments so as to hit that best bid/ask MM. I was misinformed to think you would break it up into larger chunks and would search down the MM list for a bigger posted block or you would just pickup the phone and strike a deal with a MM that you discerned could make the bigger block happen. My response to Coyoti, reflects my personal experience watching my ISLD best bid/ask sit there unfilled, while trades of similar size are ticking across the "time and sales". In those cases, the INCA or ISLD traders are setting the market for those internal trades or those trades that are ticking by that are almost simultaneous buy/sell matches happening on Instinet or another ECN. The sad part for the INCA or ISLD traders, is when another trader places an order through those services at a better bid/ask, then the time stamping on the level II screen for my order is lost. When that other ISLD gets filled and disappears from the screen, my order reappears and gets a new time stamp and cascades down the priority list. Even though I was originally ahead of that MM at a certain price just 10 minutes before, the MM's order is now ahead of mine. Oh well, I guess if I can't get an immediate execution when I'm trying to split the spread I should yank the order after a couple minutes anyway.

To: Jay Morrison who wrote (2380)	1/21/1998 7:41:00 AM
From: steve goldman	Read Replies (1) \| Respond to of 4969

Jay, absolute rules for any trading situation are not prudent. Many time I have seen clients and traders give me orders to buy some stock that is 10 x 10 1/16. They want to buy 2000 at 10. I try to explain that the stock looks strong and that they should just pay the 1/16. No...they want it at 10, sometimes. Sometimes, they get it at 10, congrats! Sometimes they miss it and the stock goes to 18 in a few months. Look, once you decide to bid 10, you will get it if it weakens! You wanted it, you decided it was worth it, now get the stock. A 1/16th shouldn't make the difference as to whetheryou want in or not. Most of the time, people dothis because they aren't quite sure and would probably rather not own it as readily as they would own it. If that's the case, BUY SOMETHING ELSE> Plenty of stocks out there, buy the ones you really want.The most you could save is the 1/16 x 2 or 125 bucks. Not that the 125 isnt a lot, but its being penny wise and pound foolish if the stock goes to 18 and you don't own it. I am in no way saying to try to save the 1/16. I would never suggest not attempting it. How I would handle it wouldbe to at least tell your broker/trader/firm to set you up with soes, superdot (whatever) at 10 1/16, to pay the 1/16th if it gets stronger, but to keep bidding on selectnet or by displaying the bid at 10. Regards, Steve@yamner.com