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.

Non-Tech : Datek Brokerage $9.95 a trade -- Ignore unavailable to you. Want to Upgrade?

To: Craig who wrote (6762)	2/10/1998 8:36:00 PM
From: per strandberg	Respond to of 16892

But how do you know the orders filled at Bid were BUY orders?

To: Craig who wrote (6762)	2/10/1998 10:42:00 PM
From: Jon Tara	Read Replies (2) \| Respond to of 16892

Not sure why this is so hard to understand, Craig. Here are a few of many scenarios that could have occured: Stock is 10 7/8 x 11 1/4. You place your buy order at 11, which becomes the new bid. Datek duely puts that bid out on ISLD, which represents it to the market. Market makers see this, and react, other MMs raise their bid to 11. Or not. Maybe you are still the only one on the bid. Doesn't matter. Schwab customer comes along, sees the uptick, decides he will wait no longer. Decides to buy some at 11. Schab is currently bidding 10 3/4, offering at 11 1/4. It's near the end of the day, and they've got some inventory they don't want. They happily sell some shares to their own customer for 11. Why would they want to buy yours? Alternately, Merrill customer is the one who decides they can't wait. Merrill doesn't have any inventory, but the MM remembers that the MM at Schwab owes him a favor, figures he has some, and knows he doesn't like to keep it over-night. So, he tries the order at 11, preferenced to Schwab. Why should he buy your shares, when he can cancel a karma debt? Alternately, DLJ customer is the one who wants that stock now. DLJ doesn't have any inventory, but is paid by XYZCo for order flow. DLJ sends the order to XYZCo, which doesn't have any inventory either, but shorts it to DLJ. Alternately... Lesson is that the only guarantee you have is that the bid can't drop below yours without your buy order being executed, and can't rise above your offer without your sell order being executed.