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Strategies & Market Trends : From the Trading Desk -- Ignore unavailable to you. Want to Upgrade?

To: Jay Morrison who wrote (4041)	12/31/1998 1:03:00 PM
From: Steven Bowen	Read Replies (1) \| Respond to of 4969

I don't remember the original question, but I don't think your answer is correct; "Your bid was $1 1/8, but you are not going to get filled by a discount broker until the market falls to a point where the stock is $1 bid, $1 1/8 offered." I think this would be illegal. If he has the best bid of 1 1/8 on the table, the displayed bid better not drop below 1 1/8. If he puts a limit order in, the MM has something like 30 seconds to either fill him or display him if he improves the inside quote. In this case 1 1/8 is the best bid and would have to be displayed. "so that the discount brokerage firm can make the spread." Most discount brokers won't make the spread. They sell the order flow to a MM who can try to make the spread. "how do trades take place at $1 when someone has an bid in at $1 1/8 without getting filled. The discount broker is not showing the market the $1 1/8 bid until the offer is there." I think this would be illegal. If he enters a best bid of 1 1/8, trades at 1 for the most part should not happen. The stock should not be able to trade thru your order. The only risk he is taking is having the stock tick up before he gets a fill at 1 1/8.