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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (41449)	3/29/1998 10:20:00 AM
From: RobZ	Respond to of 61433

Thread: Interesting article for freqent/day traders is in this week's Forbes. Though the popular press must be taken with a grain of salt, I thought it was interesting. I provide only a couple of brief excerpts for those who are interested. The gist of the article was the "guerrilla marketmakers" such as ISLAND, 2000 of them, that have capitalized on the 1996 SEC deregulation of NASDAQ trading and now account for about 12% of total trade volume. These guys set up shop in small offices and trade so as to cut the spreads traditionally exploited by the likes of Goldman Sachs, Merrill Lynch, Morgan Stanley, and others. Exerpt: "...Basically in the old days your buy order went to a marketmaking firm, which charged you the offer side of the market, pocketing the difference between that price and the lower bid. This difference is the spread. The marketmakers rarely allowed customers to trade inside the spread, even if one customer was willing to pay the same price that another customer wanted to sell his stock for. It wasn't exactly a monopoly. It was shall we say, a closed game... "...In the past your bid would not have appeared on the NASDAQ screens because official NASDAQ marketmakers posted bids at their discretion. Before the new SEC mandated rules, marketmakers would often let limit orders pile up unexecuted unless the market rose or dropped to a point where they could get their accustomed spread." Something like this happened to me last fall. I traded (at least my broker said so) GE at noon at 72 (verbal broker quote) and when I got the slip it read $70, the low/close of the day. A liquid stock like GE should be traded in seconds. Somebody shafted me. Oh well, what recourse do I have, its my word against theirs. "...In the end the SEC decreed, in August 1996, that marketmakers were colluding and gouging the public. In December 1997 marketmakers agreed to pay 1 billion$$$ to settle a class action that investors brought. Equally important the gates of NASDAQ were thrown wide open." I think this may be why my broker (OLDE) has discontinued the free 1000 share trade offer. Spreads have narrowed. Go ASND! Let's bust $40 and "Get Shortie" on the way to a solid earnings report. RobZ