Onekema...
1. Limit order higher get you that price....you will only own the stock if the stock opens lower than your limit order (assuming an attentive execution), yet if you think abc closing at 10 will open at 15 and put a 15 limit on it and it opens at 13, you will get 13. The firm prints you at 15, take your money, say goodbye and call the NASD. market orders can be dangerous depending on how attentive you are to the preopen action.. A sk people who had monday morning market orders for ENMD, stock closed 12 and opened at 85.....the person who though, heck, i'll pay 15, 16, and had to deposit 85k for the purchase, worth about 35? k at weeks' end, was not happy.
2. After hours trading? There is trading whenever you can find a contra-party...some systems facilitate afterhours like ECNs, INCA and SNET. Right now, if you wanted INTC, i'd say, no way. Sunday at 9am aint happening....but monday at 8am, when traders start showing up you might get stock..but you will also pay or lose some premium because they are takinga chance...hey you want it, you have to pay up.
3. to an extent, preopen prices are only way to guage whats coming..also i know traders at firms and might get indications as to what the stocks will look like, as well as you can ask your floor broker to check the book, as specialist what it looks like..
for instance....if SEG looks to open up 1, but it wont open till 945 because the specialist is matching large buy orders, savy traders might buy up some qntm if they dont open it on a gap because when people see the big seg piece, they feel all dd will move, so THEN they go to qntm....food for thought.....
See my comments below from another thread regarding cheap commissions. Also, someone on that thread mentined that Cybertrader and MBTrading charge ECN and other extra fees. Anyone have an idea of these or a URL?
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dead accurate on your statement regarding order flow compensation. Everyone has costs associated with doing the transaction...snet fees are 2, 3 bucks, ACT fees add up, ECN charges of $15....how in the world could Olde do commissionless trading? Or someone else do it for $9.99 ....order flow compensation.
Large market makers pay good money , about 1 to 2 cents per share to various firms to route your order nondiscrimintorily to the market maker. The market maker, then , according to the manning rules, gets 30 seconds to make the market, make some type of spread, or they must either then reflect the order or route it to an ECN.
These ordes which are routed are usually not given the same level of execution that a Cybertrader or MBtrading provide and definately not the same level of execution that a firm such as Yamner provides. These types of firms are executing your order with your best interests in mind, that is, utilizing every execution system to get you the best price, not trying to skim an 1/8 or 1/16 or more.
Often people ask, well how frequent could I expect an improvement? Nothing is for certain, but larger firms will pay 1 or 2 cents for most order flow thus if you had 1000 shares, they are betting 20 bucks that they can make more than 20 on your trade. They are investing 20 bucks to pay the firm (e-whatever) to route the order to them, and now they must get a positive return on investment.
Companies like Cybertrader, Mbtrading allow you to direct your own trades as though you were sitting on my trading desk, right at the various terminals, with reasonable delays for processing and routing,etc. Our traders execute the orders immediately for you since most people are better at picking the stocks and movements and leaving the execution to someone right on the circuits, at he superdot terminal.
ie...William, you characterization of "traditional' brokerage firms is a bit off. Most have become competitive with the timely executions of newer and growing firm. Its also inaccurate to simple say traditional firms. That would be like lumping Cyber and MBtrad in with E-schwab and E-trade. There are firms, that handle orders by phone and give immediate, split second executions that would be unfairly group with the Merril, Goldman and Smith Barneys of the world.
On the downside, and I mentioned it above, I think that one error traders make is not understanding the rules, idiosyncracies, advantages and disadvantages of the various execution systems. Some traders might trade 4, 5, 10, 20 tickets a day. Thats a good amount but still pretty limited. A professional trader t the right firm has far great experience and exposure to various stocks, order size, movements in market, not because they are any 'better' or have a better track record of picking stocks, no thats selection, but simply because they better understand the limitations of various systems.
My point is that it would be unfair to assume that the online 'trader' simply has to go with a cybertrader or mbtrading where they are 'executing' their own trades. If they do go this way, they had better learn EVERYTHING about all the execution systems, because, for sure, those they are trading against, the market makers do.
Many do wondefully and some of the technologies that Cyber and MBtrading offer are, well, to say the least, revolutionary.
Some mght in the end be better off doing the market watching, stock selection, and then working with a trading firm that as quickly handles the execution for you.
Regards,
Steve@yamner.com
yamner.com |
