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

To: Rick Faurot who wrote (1744)	11/1/1998 10:31:00 PM
From: TraderAlan	Read Replies (1) \| Respond to of 7382

Rick, I'll pass as I'm a technical trader and many others know a lot more about the MM business than I do. Believe though some of these big houses are in the wholesaling business, not trading business. That may affect the numbers you're seeing. Hopefully others can help. Alan

To: Rick Faurot who wrote (1744)	11/1/1998 10:45:00 PM
From: Colin Cody	Respond to of 7382

NITE & MASH pay for order flow. Even if they are not "on the inside quote" when you look at the box, that does not deter a retail broker/discount broker from ringing them up for the trade. Often times they are happy to do the trade at the inside price. Some order flow "contract terms" REQUIRE the MM to honor the inside quote, even if he is not there himself. Colin

To: Rick Faurot who wrote (1744)	11/2/1998 6:12:00 PM
From: Eric P	Read Replies (1) \| Respond to of 7382

Rick: I would propose that the "axe" in a stock is not necessarily the market maker who trades the most volume in the stock. As previously pointed out, NITE and MASH create heavy volume by payment for order flow. This likely is not, however, "smart money" or "deep pockets". On the contrary, payment for order flow is simply executing trades for the lowest members of the investment food chain: Retail investors. NITE and MASH pay for order flow to enable them to buy at the bid, which they offset by selling at the ask, resulting in a relatively small overall impact on the direction of the stock. Market makers with large trading operations, such as GSCO, MLCO, etc. use proprietary trading systems to trade large sums of money. They have the "deep pockets" to MOVE markets, or halt them in their tracks. I would consider them the "axes" to monitor, not the volume leaders which may not heavily influence the direction of a stock. Good Luck, -Eric