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To: Sam Scrutchins who wrote (10767)	4/2/1998 11:46:00 PM
From: GS_Wall Street	Respond to of 213177

Sam and everyone I will try and explain how and what Level II is but it is hard since basically it is a view of the NASDAQ "book". The only people who can transact are Market Makers or registered ECN (Electronic Crossing Network) there are a few, One is INCA which is owned by Reuters and is call instinet. This is used by MM or institutions to transact. Totaly anonomious all people can see is INCA making the transaction. ISLD is the Island system typically used by small indivdiuals internet brokers are now using ISLD. For example Datek used ISLD as first line. The other people that show up are all the registered MM, Merrill, Goldman, Dean Witter, Morgan Stanely, etc etc. Now when a MM transacts he can transact with another MM to stay flat. He can buy in his own account, he transacts for customers, individual or institutions. There is NO WAY to tell if the MM is buying for himself or someone else, only he knows and thats what gives him the edge. Also as part of the MM responsiblity he is buying stock and selling stock. When he is transacting on both sides I assume that he has no real order flow and is just making a market. Studying Level II does not provide any more information that just a feeling. Unless people are daytrading I would not be concerned about getting them they can be expensive.