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

To: TraderRick who wrote (2549)	2/8/1998 9:28:00 PM
From: rabbi	Respond to of 4969

basicly they hate each other with a passion

To: TraderRick who wrote (2549)	2/9/1998 8:26:00 AM
From: steve goldman	Read Replies (1) \| Respond to of 4969

Traderrick, Please don't take this the wrong way....I hope some of these threads and messages get you there, but you have a long way to go, in learning the nasdaq system, the marketplace before you would come to a level of knowledge that I would consider absolutely necessary before day trading. The relationship between the SOES execution system and OTC market makers, as well as the dynamic nature of the OTC marketplace, is fundamental to successful trading. Without it, I would consider it on par with playing blackjack andnot knowing whether the dealer has to stick at 15,16 or 17. First off, there is a good description of oTC markets, SOES executions etc. on our website at yamner.com. go to Yamner University and then Yamner Library. Also check out the document downloads. Browse around. Should prove userful. Lets starts in generalities and then please post any specifics you then need: SOES - Small Order execution System - an electronic execution system which executes orders against OTC market makers who have legally registered as market makers in the particular stock. In line with the firm quote rule, a market maker who is on the bid or on the offer is obligated to be exposed to a certain minimum number of shares at those prices, or must be in the process of updating/adjusting their quote after having just been executed against. Thus, if yo see GSCO, MLCO and PWJC at the bid, they could all be SOES elgible. Nonetheless, only the first is qued up. Thus if GSCO is first in line, someone can soes sell to him, he then gets some time to readjust his quote, still holding his place in line and not permitting anyone else to SOES trade. You could try to use SNET to trade against MLCO and PWJC, preferencing an order to them, (if your firm permits or will do this for you) but GSCO is first in line, gets to do the trade and/or update his exposure at that price, or step down. There are a ton of fine/small points when soes trading. Lets start with this, visit our website and then ask a few more questions once you have a base understanding of the system. You asked where the other trades, trades in between come from. Lets say the stock is bid 10, offered at 10 1/4....i think you said it was 2 x 4..... Well, first off , the first bidder might be getting hit with SOES trades.....the other mm might be getting hit with snet trades. (afterall they are displaying a bid so if you wanted out at those prices, you might first go to these firms.) Also, other firms, while not being on the bid or offer, want stock as well and will snag stock from ECNS, SNET offers as well as letting the word out they want stock. Remember, 4 people are selling at 10 1/4 as well as others with higher offers. If the stock is moving higher,e veryone wants it. They might tip their hat and give away their interest by going to thebid, but they will grab offers, grab ecn offers and snet offers. Remember, if they can sell at 10 1/4 an dget stock at 10 1/8, theymake an 1/8 profits. Do that a few hundred times and its very profitable. lets start with that to chew on. Regards, Steve@yamner.com