To: Piranha who wrote (5292 ) 7/14/1998 8:26:00 AM From: Joe C. Read Replies (1) | Respond to
The short answer is usually but not always - depends on the stock and how big the block is. Say Fidelity wants to buy 100,000 of INTC. The Fidelity trader will place the order with someone they think can get the whole thing done without impacting their price. MM may try buying through his bid. He gets some fills - say 20 or 30 for about 20,000 shares. All of these trades are between himself and the street. Eventually, he needs to print the customer side. He will probably put up one print for 20. Generally, the institutions can't be bothered with the small pieces. They want to see fewer larger trades being reported to them since to them blocks of 5's and 10's are small. If the MM can find another big player that is willing to sell, he will usually buy the block at the bid and turn it around at the ask. You see, a block of say 40 twice at two different prices. Sometimes, the MM is working off a commission only and the MM is giving the bid price to the institution. Sometimes, the MM may go into an ECN such as INCA to try to get the shares (while he's selling on the quote to keep the price down). The important point to remember is that the MM does not want to impact price because that shows he did a poor job of filling the order. If the price starts moving, he may print earlier to get the trade up. Sometimes, they wait until the entire order is filled before they print. Anyway, I'm wandering, the short answer is that the bigger prints usually do indicate the institutional side only because they like it that way. They don't want to be on the phone all day for each little piece the MM fills. How it's done depends on the stock, the market at the time, etc. I'm not a trader so take this for what its' worth. Joe C.
