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

To: Jay Fisk who wrote (2190)	3/28/1999 12:57:00 AM
From: kaz	Read Replies (1) \| Respond to of 3216

Jay, I certainly don't want to put words in anybody's mouth and, frankly, I don't know what JD is talking about when he references a subscription only order. Locking the market is when you are buying more shares than are on the ISLD ask or selling more shares than are on the ISLD bid. So, if ISLD has 500 shares bid at 50 and you want to sell 1000, your first 500 will be sold at 50 and the rest cancelled because you would be asking the same price that buyers are bidding (assuming there are other bidders at 50). If you're selling, you can't show on Level II at the same price as the bidders (reverse this if you're buying). This is locking the market. If an ask shows on LII that's lower than the best bid, this is known as crossing the market. It happens rarely and I'm not sure how. I can surmise that when JD mentions "subscription only ISLD order" he means an order that will only go to ISLD and not show up on LII if there happen not to be enough shares to fill your order. I welcome an explanation of this since I suspect I'm wrong. Sorry to confuse things, Paul Kaz

To: Jay Fisk who wrote (2190)	3/28/1999 1:03:00 AM
From: JDTrader	Read Replies (3) \| Respond to of 3216

Dear Jay: you have 1000 AMZN that you bought at 125. The level II window is : 125 bid by 125 1/8 ask Amzn anounces that they are having problems, the price starts falling. You want to get out because you know the price would be down to 50 in no time The Island book look like this Bid ** Ask $120 300 $122 600 $118 500 $123 1000 117 1/4 600 ** $124 5000 You have 1000 shares. This is what all programs allow you to do. You enter an Island order to sell 1000 shares at 117 for example. The Island book will start at the top of the book and fill you as following: 300 at 120, 500 at 118 and 200 at 117 1/4. You are OUT of your position. Cybertrader, however, will reject your order and says that you were locking the island book because your selling price is lower than the inside bid. I hope that it is clear now. Don't use this execution method but in very fast markets that you know if you dont get out immediately, you will loose your shirt. The rule against locking the market is a NASDAQ rule and only applicable to the leve II window. Normally, Island book will post your bid or ask if they are better than those posted in level II window. However, by having the option of selecting your order not to be posted on the level II window, you avoid violating NASDAQ rules and still get filled with the listed orders in the Isalnd book. In fact, in real life, if you sent an order like my above example, your order never gets posted, it will get filled the second it hits the Island book.