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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (4834)	8/1/1998 2:27:00 PM
From: Eric P	Read Replies (1) \| Respond to of 12617

Will direct entry enable me to close the "liquidity gap" on OTC stocks that trade "best" b/a of 1/8 to 3/16? In other words, if I work stocks like NETA, PSFT, TLAB through direct entry, is there a good chance I'll eventually see an average spread paid on these of 1/16 or less? Direct order entry using an ECN is a double edged sword. On one hand, it can allow you to actually profit from the spread by buying at the bid and selling at the ask. The downside is that by placing a limit order, you can only get filled if someone wants to take the other side of your trade. As a result, you may often not get filled when you want to. Choosing which method of order entry to use should usually depend on when you like to buy/sell stocks. If you are trying to buy a stock that is rocketing up, you will notice that virtually all trades are occurring at the ask and you will usually have to place a market order to get filled. On the other hand, if your trading is buying as the stock falls to a support level, you may have a lot of luck placing an ECN limit order at your price and waiting for the market to take it out. There are no hard and fast rules, the best thing to do is try different approaches and see which works best for you. Good Luck, -Eric