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Non-Tech : The Island ECN -- Ignore unavailable to you. Want to Upgrade?

To: Robert Cohen who wrote (128)	10/28/1998 11:18:00 PM
From: Bilow	Read Replies (1) \| Respond to of 202

Hi Robert D. Cohen, M.D.; Sure you can offer 2000 shares of XYZ at 10 1/8 when the best ISLD bid is 10 3/16 x 500. Assuming nobody gets those delicious shares sold at the 3/16 before you, the resulting action will be that you will sell 500 shares at the 3/16, and will sell somewhere between 0 and 1500 more at the 1/8, depending on the ISLD size at the 1/8th. My system is set up so that if I get a partial fill, it sends the order back again to fill the rest. So it is conceivable to me that you would only sell 500 shares, and the rest of your order would be killed in the above situation. The great thing about ISLD is that if you are in a position that you have to get out of, (for instance, your mom calls you to dinner, or maybe the stock is ripping against you, or maybe somebody fired a weapon in the House of Representatives...) you can hit an out of the money ISLD bid or ask, and get an instantaneous, guaranteed fill. This is useful if the other market makers aren't honoring their quotes. (Maybe their quotes are stale, or the feed is slow, or they just don't want to lose money.) At least that's the way it works for me. I use ISLD for the vast majority of my trades. Used it about 45 times today. But my observations are completely taken from using an ISLD direct connection. Maybe if you go through another way, there are other limitations. -- Carl

To: Robert Cohen who wrote (128)	10/30/1998 4:58:00 PM
From: Robert Cohen	Respond to of 202

The following is an email reply from Eric Patterson regarding my question. I found it to be very clear and hope it may help others. Re: ISLD. As you said, there is quite a large list of limit order bids and offers on the ISLD book. If you place an ISLD order, four things can happen: 1) Complete fill: If any existing limit orders are posted on ISLD that are within your price limits, you will be filled by these posted orders. Example: DELL is trading at 62 bid by 62 1/16 ask on Nasdaq. You place an ISLD order to buy 2000 DELL at 62 1/4. The ISLD order book has 300 offered at 62 1/16, 500 offered at 62 3/32, 3000 offered at 62 1/8, and 2000 offered at 62 1/4. Your entire order will be filled as follows: 300 at 62 1/16, 500 at 62 3/32 and the remaining 1200 at 62 1/8. 2) Partial fill: Assume the same information from the above example, except you order 2000 shares at 62 3/32. Now, your order will be partially filled as follows: 300 at 62 1/16, and 500 at 62 3/32. Your remaining 1200 shares cannot be filled because there are no opposing matching orders. Also, the remaining orders cannot be posted on Nasdaq, since it would cross the market (i.e. you would be attempting to place a bid above the inside offer price; Note: a locked market would also not be allowed, which would be attempted to post on Nasdaq a bid price which equals the inside ask price). 3) No Fill: If there are no existing ISLD orders on the book that matches with your order, and your order cannot be posted on Nasdaq because it will lock or cross the market, then your order will automatically be cancelled and returned to you. Example: DELL is trading at 62 bid by 62 1/16 ask on Nasdaq. You place an ISLD order to buy 2000 DELL at 62 1/16. The ISLD order book has 500 offered at 62 3/32, 3000 offered at 62 1/8, and 2000 offered at 62 1/4. There are no existing ISLD offers at or below your bid. Therefore, you currently cannot be filled from ISLD. If posted on Nasdaq, your order would lock the market in DELL at 62 1/16 bid and 62 1/16 offered. Therefore, the ISLD system will not allow you to do that and your order will be returned unfilled. For more information, see Chapter 2 of the Nasdaq Traders Manual: nasdaqtrader.com. ual/tradermanual.stm 4) Order posed on ISLD: If your bid order is lower than the inside offer, your order will be posted on the ISLD book and the best bid/offer price on the ISLD book will be posted on Nasdaq.