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To: TFF who wrote (6044)	12/19/1998 2:22:00 PM
From: funk	Respond to of 12617

I hope this helps. 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? 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

To: TFF who wrote (6044)	12/20/1998 5:08:00 PM
From: funk	Read Replies (1) \| Respond to of 12617

Funk's motivation... As hard as it may be for my many fans to believe, I finally agree with Funk on something. The hell with news and hot tips and so on. Daytrading stocks as far as I am concerned requires stocks with consistent large intraday ranges. ... scanshift Message 6718710 This excerpt exemplifies the whole purpose Silicon Investor. The intent here is to exchange quality information and ideas. Obviously each thread has its intended subject and the vast majority of us try to respect it. It is a relatively uncluttered exchange of ideas that draws most of us together, " I think". If you dig back, you will see funk was a rank newbie that didn't really know one single thing about trading when first arriving to Silicon Investor. Less than two years ago, I really didn't know what a bid - ask spread was. If ever there was a sheep to be shorn it was me. Despite the immense proportions of my ignorance, I have always had this magical combination of arrogance, stupidity and luck. It was with this unholy triumvirate that I opened the first account in my life. I have never named my first broker. A web based discount broker wholly unsuited to the task of trading. Since I barely understood the most fundamental workings of the market and had completely inadequate tools; I spent exactly 24 hours with a gain in my account and promptly went under water and steadily sank deeper as I kept trying to learn to swim. SILICON INVESTOR has served as an invaluable source of information; while on my journey from rank newbie "victim" to a sophomore trader with half a chance. to be continued....