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

To: kaz who wrote (2704)	12/15/1998 3:23:00 PM
From: JerryPutnam	Respond to of 7382

There is a belief that it is ok to hide orders if no one can see them. Some people feel it is good for liquidity if larger orders can interact. The people placing those large orders don't want people to trade against them.

To: kaz who wrote (2704)	12/15/1998 3:32:00 PM
From: JerryPutnam	Read Replies (1) \| Respond to of 7382

This is a more detailed description of how TNTO works. I thought it would be useful. 1) If your order is larger than the total offered at the inside we send a piece to everyone at the inside simultaneously. We build the order electronically as follows, 1) ECN's get the size they are showing. I am going to change this since there is a little known new rule which changes what an ECN must do if it gets a larger order than the displayed size and has a reserve order for larger size. A reserve order placed by institutions allow them to enter an order for say 100,000 shares but want to show it 5000 shares at a time. In the past the ECN would reject the additional size and than refresh the quote to show another 5000, in my example above. Now they must fill the whole size if they have it in reserve. Next, we look at what the MM's size and build an order for their displayed size. Finally, any excess is evenly distributed to the MM portion of our preference. Of course if ARCA has another customer order on it's book we cross internally. This whole mess goes shooting out over the NASDAQ network and private connections, in the case of ISLD, INCA and soon BTRD, BRUT, GSCO, MASH. The process takes on average 20 milliseconds. 2) If you order is smaller than the displayed size we go through a different process. We keep tabs on who, historically have filled us vs rejected our preferences. This ratio is used to pick and choose who to send the order to first. In many cases you order is split up and sent to multiple ECN's and MM's because you size is larger than any on MM or ECN is displaying.