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

To: Mama Bear who wrote (4213)	2/18/1999 8:42:00 PM
From: steve goldman	Read Replies (1) \| Respond to of 4969

agreed, yet let me another dimension to it, what I think a "good broker" should be able to offer. Lets say you come in and the stock is 4 1/4 to 4 3/8, you want to buy 2k at 4 1/4. The broker should be able to place you on the bid at 4 1/4, immediately, in a few seconds, and then tell you the action in the stock, and if you arent getting filled at 1/4, (noone hitting your bid), then go around and buy it at 3/8. I do this alot with clients. Some clients are initially put off as though I am suggesting they buy it at the market, because I dont want to work the order, or they think that I may make something extra if we pay 3/8 or they become defensive that they "dont want to pay anymore than 4 1/4". Here's my position. Its easier work to simply take a bid at 4 1/4 , slap it on ISLD and hang up the phone. Yet, for most people, what is the big difference between 4 1/4 and 4 3/8. You want to own, own it. DOnt get cute for a teenie or 1/8th. Thats not to say if the stocks "looks" weak, try it at 1/4 if you think you can protect the client at 3/8, but if it isnt happening at 1/4, payup and take the 1/8. I cant tell you how many times people get cute for the 1/8 and miss a two point run. Limit orders to sell Dell at 109, that missed by an 1/8th and then the stock goes to 75. That teenie or eigth costs you 30 points. And if you end up paying 3/8 instead of a 1/4, the most, the very most you can ever "complain" about is the 1/8...if the stock tanks, implodes, falls 3 points, guess what, with a bid at 1/4, you're owning it at a 1/4. You only cost yourself that 1/8th. Here's how I would do it: 1. Get the right firm. 2. If the stock is active and you're buying at thebid at the time you are placing the order, ask the trader to wait with you, to give you a picture on the stock, while the bid is out there...if the stock strengthens at all, cancel the bid and take the offer. Own it. Or, one way I suggest clients give it to me, when they dont want to wait is " Buy 2000 ABCD 4 1/4 with 1/8 discretion, work the order". The 1/8th discretion gives me room to go up an 1/8th. Forget giving this to any electronic system. No such thing. Most would never feel safe doing this unless they were with a firm they trusted intuitively. Anyway, there is more available to investors than straight bids and offers. These are some of the services we offer which make up for more than the few bucks extra we charge. -Steve@yamner.com