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Non-Tech : MB TRADING -- Ignore unavailable to you. Want to Upgrade?

To: gbh who wrote (1000)	9/4/1998 5:07:00 PM
From: Eric P	Respond to of 7382

Gary: If your order adds liquidity to the ISLD book, then they charge a $0.001 per share($1.00 per thousand)ISLD ECN fee. However, your order removes liquidity from the ISLD book, then they charge you $0.0025 per share ($2.50 per thousand) ISLD ECN Fee. Tanner, I still don't understand this. Are you saying that if you buy on ISLD the fee is $1/thousand and that if you sell on ISLD, the fee is $2.50/thousand? Let me try to explain. If you post an order to the ISLD book with the hope that someone will choose to execute against you => This adds liquidity to the ISLD book and the charge is only $1/thousand. On the other hand, if you see an existing order that you want to execute against, this effectively removes liquidity by filling and removing the order that you executed against. As a result, the charge is $2.50/thousand for this trade. Also, where do they come up with the $15/thousand for SelectNet preference of ISLD marketmaker? ISLD is an ECN,not a marketmaker? I'm more confused than before. Sorry. Finally, if your broker is not a direct member of the ISLD system, your order would have to be routed through SelectNet to get to ISLD. As a result, you would have to pay the $15/thousand additional to route the order this way. Note that this is not common for many brokerages, since most are directly connected to the ISLD system. Hope this helps to clear things up... -Eric

To: gbh who wrote (1000)	9/4/1998 5:12:00 PM
From: Tanner	Respond to of 7382

Gary, Q: Tanner, I still don't understand this. Are you saying that if you buy on ISLD the fee is $1/thousand and that if you sell on ISLD, the fee is $2.50/thousand? A: ISLD charges the broker/dealer $0.0025 per share ($2.50 per 1000 shares)if the order removes liquidity from the ISLD book, and they rebate the broker $0.001 per share ($1.00 per 1000 shares)if the order adds liquidity to the ISLD book. That does not necessarily mean you are charged more if you sell than if you buy. There are always two orders involved in each match, one of the orders adds liquidity and the other removes it. In a given match, the order that was entered first is always the one that added the liquidity. When a trader sends a new order to ISLD, that order is first scanned against orders already on the ISDL order book, and if there is a matching order on the book, you get an immediate execution. If this happens you have removed liquidity, since you have taken away an open order on the ISLD book. If no immediate match is found, then your order is added to the ISLD book and waits for another order to match itself against it. Because your order was added to the ISLD book, it has added liquidity. Whether you ISLD order was to buy or sell really doesn't determine whether or not you have added or removed liquidity, what matters is whether or not you were the first or the second party in the transaction Q: What route would these orders take if not SelectNet? And why does Cyberbroker refer to this as DATK? DATK is a marketmaker, and has nothing to do with the ISLD ECN (as explained to me by Datek Online brokerage). A: You can access the ISLD ECN in one of two ways. You can either enter your order directly onto the ISLD order book, or you can use SelectNet to broadcast your orders to all marketmakers, or preference one individual market maker. I think CyberBroker refers to the process of accessing the ISLD book directly as DATK, probably because the President of Datek owns the ISLD book as a separate venture. Q: Also, where do they come up with the $15/thousand for SelectNet preferernce of ISLD marketmaker? ISLD is an ECN,not a marketmaker? A: An ECN is essentially a type of MarketMaker that broadcasts their subscribers' bids/asks to other market makers. When you see ISLD on your market maker level 2 screen, they are acting as a market maker, but the difference is that they are purchasing and selling stocks on behalf of their subscribers. Hope this cleared some things up for you.... Let me know if you still have any questions.