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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (6750)	3/20/1999 3:37:00 PM
From: Eric P	Respond to of 12617

Alan: I think you make a very good point. If I could find a discount payment for order flow broker, that would guarantee me a 5 to 10 second fill every time at the inside bid or ask ==> I would move my account in a heartbeat. In a fast market, however, I suspect the market makers used by the payment for order flow brokers will sit on your order for 1-2 minutes, sometimes costing you 1/2 point or more. I would be interested in hearing from anyone who uses a payment for order flow broker. How fast are the executions when trading an active stock? Typically 15 seconds? One minute? More? -Eric

To: TraderAlan who wrote (6750)	3/21/1999 3:25:00 PM
From: TFF	Respond to of 12617

What if Day Traders Had to Pass a Test? -------------------------------------------------------------------------------- Related Articles The New York Times: Your Money Forum Join a Discussion on Investing -------------------------------------------------------------------------------- By GRETCHEN MORGENSON EW YORK -- The era of wide-open day trading in stocks, when any investor with money and moxie can sit down in an office and lose both, may be ending as suddenly as it dawned. Regulators, rightly worried that many day traders don't understand the risks of the practice, are starting to rein in the day-trading firms. On March 10, the Philadelphia Stock Exchange proposed a rule change to the Securities and Exchange Commission that would close a regulatory loophole used by many such firms registering as Philadelphia exchange members. And next month, for the first time, the exchange will send teams of auditors to members' offices to conduct examinations. Both moves grew out of a pattern observed lately by the Philadelphia exchange. Day-trading firms were flocking to join the exchange, making it their regulator, rather than the National Association of Securities Dealers, for example. As of Feb. 17, the exchange counted 2,318 people day-trading at member firms, an increase of more than 1,300 since last June. Why the stampede? Unlike its regulatory peers, the Philadelphia exchange has not required its off-floor traders to pass the NASD's Series 7 exam. That tough test comprehensively covers the characteristics of different investments, the securities laws, the proper way to figure margin requirements and other intricacies of finance. Instead, the exchange has asked members to complete a five-page application and to submit copies of their fingerprints. The day-trading firms may also have chosen the Philadelphia exchange because its examinations staff is decidedly smaller than the NASD's. The firms, many of them set up as limited liability companies, consider the people who trade with them professionals, not customers. This allows them to get around customer protection practices like insuring that an investment strategy is suitable to a person's financial situation. Under the exchange's proposed rule, any trader associated with a member firm would have to pass the Series 7 exam. Meyer S. Frucher, chairman and chief executive of the exchange, said the change addresses the worry that day traders know too little about investing. "We felt that people who did not have sufficient background as traders were being enticed to come in and risk large sums of money without education," he said. One of the big day-trading firms that belong solely to the Philadelphia exchange is Bright Trading of Las Vegas. The firm has 300 traders in 28 locations. Bob Bright, a principal, says the firm welcomed the rule change. Bright said the firm was not an NASD member because it did not deal with retail investors. When traders call, "we do an interview," he said. "We see if they're qualified," he said. "We insist they go through a training program." But a former customer of Bright Trading has told regulators that was not his experience. Even though he had no background in finance and had only five months' investing experience, Bright Trading considered him a professional. "Sometimes people need to be protected from themselves," Frucher said. "If the firms that are enticing people to come in and trade aren't going to do it, the exchanges are."