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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Paul Fiondella who wrote (20914)	3/9/1998 11:39:00 PM
From: Frederick Smart	Respond to of 42771

>>I have noticed ISLD, INCA, (I believe I got those right) showing up in my level II screen. But I have also noticed that when NOVL becomes active, it appears that five or more trades flash by before any of the MM's are identified with the trade.>> ISLD - ie. The Island Trading System - is the ECN that broke club NASDAQ over the past 2 years. Josh Levine, Jeff Citron and Peter Stern are some of the best code developers in the professional trading business. The think was built on DOS - pure and simple - why? Because pure DOS was/is 2-3 seconds faster than pure Windows. If the truth really to be known inside "club NASDAQ" it was the NASD's charge to incorporate windows to begin with that created the big 2-4 second lag/arb for the SOES guys from Datek and other places to fully exploit. This and the NASD's cute creation of SelectNet - their own private better bid/offer message matching board that one could use on a preselected basis targeting specific market makers or on a global basis - targeting all MM's. SelectNet was not the instant match that you got on Instinet, but at $2 per trade it was still a lot cheaper. Developers such as Island merely made developments tools to make interfacing with SelectNet easier and faster. As more and more traders gravitated to these tools, Josh, Jeff and Peter saw an opportunity to develop and publish their own electronic book of buy/sell limit orders that mirrored their SelectNet trade/tool service. The interest was so great they even one better NASDAQ by charging only $1 per trade - a savings of $1.5 less than NASD's $2.00. If Island had to go to SelectNet to match the trade against another side, they ate the $1.5. More often they found they could match enough trades and collect $2 - one buyer, one seller - more than enough to pay for the times when they had to pay uncle NASD. The MM's tried to shut Island down as soon as it was up and running. But the Island guys had a hot line to the SEC. They coached the SEC through every nuance of how the MM's game the sytems to make the spread, providing invaluable feedback for the case in which Justice proved collusion. There is a new case that just hit the trading waves over the past 2-3 weeks. Seems two individuals have filed suit against Merrill, PaineWebber and DeanWitter covering a two year period beginning in 1992 for failing to expose/match retail customer commitments to buy/sell against better prevailing offers/bids on SelectNet. From what I am hearing this really opens up Pandoras Box - the amounts and damage estimates dwarf the $950 million which 20-30 top firms settled for in the price fixing/collusion case. I could go on an on about all these little nuances that make professional trading what it is, but I will defer back to Novell and the focus of this board. BTW - INCA = Instinet - the first NASD ECN - Electronic Communication Network. Those "five or more trades" are all coming from various ECN's of which there are about 5-6 right now: Island, Instinet, TerraNova, Troster, Bear Stearns etc. Bear might not be live yet. Check out the Chicago Stock Exchange. They have a great program for NASD trading - a black box that's backed by a specialist - zero fees, listed market trading rules, good names. Chicago was really the first to break the back of club NASD - actually is was more of an irritation than anything else for the Chicago guys were really not as aggressive as the Datek-back guys from Island. I tried to get Island to do a deal to print their trades in Chicago for Chicago has something that no other NASD site has right now - THE ONLY differentiated print for NASD trades in the National Market System (you see Chicago trades standing out separately on the NASD tape - a big selling point in my opinion). You know I need to talk to those guys again. Bye for now.