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

To: bob yahnke who wrote (4434)	4/8/1999 10:23:00 PM
From: steve goldman	Read Replies (1) \| Respond to of 4969

Bob, Let me say this with all due respect. If you or anyone out there is thinking that 'shouldnt you be filled when you are the only one on the bid' and you see prints on the bid, then you are missing a few major pieces of how the market works. Again, no disrespect intended but I think you would want me to tell it like it is.. yet here's atleast something to get you on your way. lets say you are the only one on the bid...there are tons of market makers who want order flow, are willing to be 'competitive' with the bid ask. THey offer firms across the street autofill and matching systems which, even if they arent on the bid or offer, they will match that bid or offer. Often, they offer greater liquidity. This is why Yamner is such an advantage. We have relationsips with several market makers giving us autofillwhen we need it. That is , you go to the bid bidding 100 shares at some direct order entry firm or some firm that in accordance with manning rules posts your bid....I now, at yamner have 2000 to sell. YOu are only bidding 100. Given you incorrect understanding, you would think the next piece to sell MUST go to you. Yet, I could send my order to market maker abcd who agrees to match the bid /offer for upto Xthousand shares. And so, I EXTEND, EXPAND, offer my clients greater liquidity, I sell X thousand shares at the bid in one pop, when there is only your 100 shares bididing, you see a piece wonder why you didnt get filled. My clients say, geez, how did you get off 2k when there was only one bidder on ISLD for 100 shares. Think of it like car dealers in a town. While they all have their best bid and asks, thus comprising the inside market, noonoe will let you walk off the lot. If firm asdf can do it for X, so can we. They want the flow. They want to be totally liquid, with firms coming in , selling on the bid and firms coming in buyin gon the offer. Flow coming in, flow coming out....now if they can solely be liquid, they can make teenies and eigths on pesistant order flow. This is a market makers bread and butter. Anyone who thinks a trader at a market makers shop is in the business of buying AMZN in the AM to sell in the PM is mistaken. A market makers' job is to remain liquid and not get extended on any one side. Anyway, take all the market makers, their interest in offering competitive bids/offers, autofills and you can now see how prints go off at your bid yet you are unfilled. Regards, Steve