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

To: Dan Swartzendruber who wrote (2854)	12/19/1998 2:19:00 PM
From: funk	Read Replies (4) \| Respond to of 7382

When you say "If you are taking liquidity away you are only entitled to what ever number of shares you see quoted on ISLD", what are you implying about the remaining shares? I thought the remainder of the order would remain on the island order book. Is this incorrect? Dan, please bear with me. I hope this helps. Example ONE: The bid is a 1/16 the offer is 1/8. You see on the offer ISLD with 400 shares and an MM with 200. You route an order to buy 500 @ 1/8 through ISLD. Result, split second fill and confirmation of 400 shares and the remainder is killed as it would lock the market. Example TWO: The bid is a 1/16 the offer is 1/8. You see ISLD with 400 shares all alone on the 1/8 offer. At 3/16 there are all sorts of offers. You route an order to buy 500 @ 1/8 through ISLD. Result, split second fill and confirmation of 400 shares @ 1/8 and the remainder is displayed as the new best bid by ISLD. So your 100 share bid is now displayed at the top of the bid stack: 1/8 ISLD 1 . The best offer is now 3/16 Please note: The two examples above are all examples of removing liquidity from the ISLD ECN. You are crossing a pre-existing, in this case, offer. The example below is an example of removing and adding liquidity to the ISLD ECN. Example THREE: The bid is a 1/16 the offer is 1/8. You see ISLD with 400 shares all alone on the offer. At 3/16 there are all sorts of offers including 600 ISLD. You route an order to buy @ 3/16 500 shares through ISLD. Result, split second fill and confirmation of 400 shares @ 1/8 and 100 shares @ 3/16 by ISLD. Please note: You run the risk of paying 3/16 for all your 500 shares by missing the ISLD 1/8 offer by a split second if another trader beat you there. The example below is an example of adding liquidity to the ISLD ECN. Example FOUR: Now the bid is a 1/16 the offer is 1/8. On the bid there are two MM's and an ECN each bidding 200 shares. There is mixed buying and selling. You route an order to buy 500 @ 1/16 through ISLD. Result, split second display of 500 @ 1/16 by ISLD. Please note you run the risk of: never getting filled, getting a partial and then watching the market trade up without you <<< your bid will stay live in this case, until you cancel, getting a partial waiting a bit and getting another partial that fills you for all you want. getting an instantaneous fill that makes you nervous that you may be wrong. <gggg> or finally, this has been the most rare for me but it has occurred, getting a partial and then getting bumped by an MM locking the market against you, ie he dropped the offer down to an 1/8. This outcome is very rare, but not impossible. Ofcourse all this is just from my own limited experience and my explanation may be incomplete or inaccurate. funk