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

To: DRRISK who wrote (2200)	3/28/1999 4:42:00 PM
From: kaz	Read Replies (1) \| Respond to of 3216

This is unbelievable. I hardly know where to start. "The upside is that investors are getting that meeting possibility," said Richard G. Ketchum, president of the NASD. "The downside is that they are not getting any execution guarantee." Sure, when Merrill Lynch calls me in the morning with their latest "tip" I am guaranteed the ability to buy. But, from my experience, it's ALWAYS at the highest possible price of the day. "A growing number of day traders, who buy and sell furiously all day long, hoping to capture tiny per-share profits on large trades, execute their orders on the networks. Their lemming-like behavior in stocks that are already moving has made 15-point single-day swings common." So if they're so concerned about wild price swings and the difficulty of getting filled, why are MMs only obligated to fill 100 shares instead of 1000 or more? Daytraders didn't make up this rule, but I bet we'd support a change back to 1000 share minimum obligations by MMs. "If there is no seller willing to take the other side of the trade at that price, his order remains unfilled." So why don't we set up a taxpayer funded MM that buys when no one else will? This is a joke. Remember, trading and investing is risky. That's why some people make money and others lose it. Who ever mentioned guarantees about anything? "...stocks may be costly to trade because the size of the typical trade is small: 1,000 shares or less. When smaller orders dominate trading, it is more likely that a single order will move the price of the stock, increasing investors' costs." Hence my point above. Also, I seem to recall on one of these threads within the last month an employee of a large brokerage house posted what happened when they needed to sell a large block of stock (hundreds of thousands of shares). He watched as the order was filled. Average size they were selling: 200 shares. How many daytraders do you think trade 200 share lots? From my reading of these threads, not many. Again, daytraders are being blamed for something that MMs are controlling. The article seems obsessed with dealing with front running market orders. How can daytraders possibly be held accountable for this! And just what is some guy with 15 years experience doing entering market orders in a thinly traded stock. I've had no problems hitting the bid or ask in any stock ever. If he saw a bid at a certain price, what's the point of putting in a market order. Sounds a bit fishy to me. I hope Ms. Morgenson is checking her sources because much of her article sounds just absurd. I don't know who I'm addressing right now, but I'm just furious. I wonder what the future holds for fair trading if casual investors are buying the crap that they're reading in articles like this one. Regards to whomever, Paul Kaz

To: DRRISK who wrote (2200)	3/28/1999 4:45:00 PM
From: William W. Dwyer, Jr.	Respond to of 3216

Dr. Risk, thanks for the good post. Very interesting and important reading. Kinda makes one wonder why anybody daytrades. Lots of things to watch out for, it seems. And it gets more interesting every day. :-} Bill

To: DRRISK who wrote (2200)	3/29/1999 7:30:00 PM
From: Helge Collins	Respond to of 3216

This article in The NY Times is outrageous! What is this guy's motives? There has been a lot of bad press about daytraders lately - why? Maybe someone doesn't like the (almost) level playing field new technology has created?

To: DRRISK who wrote (2200)	4/2/1999 1:43:00 AM
From: Dan Duchardt	Respond to of 3216

Since no one else has mentioned it, I'll throw my 2 cents in on the article, particularly the following section: The biggest problem posed by ECNs is the fragmentation of the market for NASDAQ stocks. The NASDAQ has always been fragmented because it has no central trading floor. The ECNs split up the market even more. When fewer trades are posted in one place, it is less likely that orders to buy and sell at the same price will find each other. Robert Colby, deputy director of the Securities and Exchange Commission's division of market regulation, said that although the changes after the NASDAQ investigation have helped investors, "it's still a dispersed market." "If the volume is going on in one place, and you are at another, you won't get executed," he said. ............ Prices on these networks are inferior on 8 out of 10 stocks they trade, according to the National Association of Securities Dealers. In large part, that is because investors are trading only with other investors who are using the same network, rather than "meeting" all other investors in the broader NASDAQ marketplace. I happen to be of the opinion that any electronic broker who makes statements like "levels the playing field", "let's you play market maker", and the like is stretching the truth, and I'm not directing this at CyberBroker or any other particular broker. It is an industry wide claim that cannot be substantiated. The fact of the matter is that ECNs are not equal to MMs, and NASDAQ has deliberately chosen to keep them that way. Traders who must use ECNs to present their quotes to the market will always be at a distinct disadvantage as long as the NASDAQ prevents them from being SOES executable. Especially now that MMs only have to execute 100 shares, they have no just claim for their preferential treatment relative to ECNs If ECNs were all linked into a central order book, that problem would disappear. The NASD wants to knit the marketplace together but has encountered resistance from some members. Until it does, the greater the volume on an ECN, the more likely that a customer's order will be matched quickly. Nonsense.. If ECNs were SOESable, and therefore capable of executing broadcast orders, instead of orders specifically directed to one ECN at a time, this fragmentation problem, the "being in the wrong place at the wrong time", would go away in a heartbeat. All the knitting that is needed could be done with this one change in the rules.