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

To: Candle stick who wrote (2852)	4/13/1998 4:21:00 PM
From: steve goldman	Respond to of 4969

I also received a number of emails today regarding quality of execution and to given an example of a quality execution. Today we had two that exemplified two possible improvements, one somewhat in line with a quality execution and the other an aberation. Regardless of the irregularity of such an order, the client, not our firm inventory account benefited. One was a buy of 500 SEG at market , at the bid of 25 when the stock was 25 x 1/8. Any mmarket maker or principal would have filled most likely at 1/8. Just so happened that the stock was printing at 25 and that is what you should get, not the offer. The other was an exceptional execution that Yi, (one of my traders) worked all day (obviously did lots of other orders for other clients but watched this stock all day)..to sell 200 small shares of CYBG at 14 1/4. Yi let the stock run all day..it happened to simply keep moving higher and was able to sell it at 17 3/16 average on a 14 1/4 limit. To me that is $600 hard dollars in clients' pocket, well worth the $35 plus 2 cent/share we charged for that one. Note that the two examples are only examples of trades that i though were unique in today's trading and do not make any suggestion about our ability to get price improvements with regularity. The point is...if an improvement can be had, and its realized, YOU, not some firm account get it. That is the "alternative" type of service we offer. To give you an idea of what I would call a bad trade, if you pulled a times and sales report for WDC, right near the close you will see the stock printing at 18ish, then quickly it drops down at the bell to 17 13/16 for a few minutes...meanwhile, printing at 17 13/16 on the nYSE, some firm is filling clients at 15/16, 18 and even 18 1/8 on third markets an on Pcoast. To me that is a bad execution. If the primary market is printing at 13/16, if that persons firm wants to be cheap and take order away from NYSE, atleast be as competitive in price as NYSE...ie..dont disadvantage your client. Regards, Steve@yamner.com yamner.com

To: Candle stick who wrote (2852)	4/13/1998 4:32:00 PM
From: steve goldman	Read Replies (1) \| Respond to of 4969

Irby had posted a question re: what happened if stock halted at opened below the limit....great point. We are not in a position to gamble at all with our clients order. Yet as the stock was moving up to the limit, Yi, seeing the strength, made the right move, contact the client and suggesting holding back and adjusting the order as indicated. Yi was in touch with client throughout the day and client gave Yi the order not held. As a result, Yi had the limited discretion to work the order as such without that liability. He also moved SOES up throughout the day and had it ready to SOES in the event it backed down to the Stops being adjusted. Normally, i might try to call the client quickly and explain the action and see if they want to execute immediately or hold off. At that point client can direct the order to be executed immediately or leave it not held. The way you phrase this, technically is, "day around, sell 200 cybg 15 or better, not held, cans (cancels) sell 200 cybg at 14 1/4." If Yi hadnt made been successful in his immediate efforts to contact client, we would have sold out the position with a few moments. You also have to "know you client", know where they are at 9am, what they want done on an order, etc., items you don't get on a computer interface. Irby you and I have discussed why our firm, in light of the cheap availability of internet trading technologies, maintains our approach. This is one particular reason. Again, as I said, it was a total abberation but worth noting. Regards, Steve@yamner.com