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Non-Tech : Ashton Technology (ASTN) -- Ignore unavailable to you. Want to Upgrade?

To: wily who wrote (836)	5/7/1999 9:40:00 PM
From: mst2000	Read Replies (1) \| Respond to of 4443

A few points to some good questions and issues: 1. wily is correct - the trading party places an order before 9:20 a.m. to buy or sell X shares of ABC Corp. at the VWAP as determined that day based on ABC's shares as traded "the regular way" on the NYSE floor during that day's trading session. The prior day means nothing. If no dedicated party steps up to take the other side of that trade by 9:20, the algorythm moves to broker dealers who are willing to commit to matches, etc. The algorythm has 20-30 steps. Shortly after 9:20, all traders with orders into the system are notified whether they have been matched and to what extent, and are free to trade "the regular way" or otherwise if they so choose on the shares that were unmatched. 1. The imbalances will not, regretably, in all instances be covered - that is to say, some orders will not be filled, and the parties making them will be so informed before the 9:30 open. However, both the SEC Rule approval itself, and all information coming from ATG since the rule was approved, references that B/D's will be invited to commit in advance (in a generalized fashion) to match unfilled orders (e.g., if no dedicated buyer or seller steps up), in order to provide liquidity (Fred Rittereiser's message to ATG stockholders on the ATG web site states that explicitly). One of the most rampant unconfirmed rumors regarding VTS (I've seen it on Yahoo and elsewhere) is that NITE has already signed up to provide liquidity in this way, paying slightly less than the .015, but paying some amount to do so and agreeing to match open orders up to some limit on some or all of the stocks traded on VTS. Let me add (repeat??) that I have no idea if that rumor is true, but it is certainly the type of arrangement Mr. Rittereiser was referring to. 2. The PHLX study was based on comparisons of actual trades over a 2 or 3 year period by certain institutions compared to the VWAP on those trades for those days. Certainly, on some days the VWAP price will be a winner, and on others a loser, but all of it depends on at what time during the trading day the trigger would be pulled on a trade by the institutions. Brokers guess wrong and some guess right, but in the world of institutional trading (just as with gambling), there is a law of averages, and the VWAP more or less institutionalizes that average and makes a guarantied standard out of it. Institutions will prefer to accept the average pricing offered by VWAP over the broader range of time, rather than risk the volatility of timing trades perfectly, ESPECIALLY index funds and ERISA qualified pension plans. At least that's what ATG is betting. 3. Optimark is a completely different system which, IMHO, is less attractive to any broker offering to step up with a generalized "commitment" to match unmatched orders. My guess as to Optimark is doing so poorly in matching orders is that they cannot attract B/D's to take on the open ended commitments which are necessary to ensure liquidity, owing to the complexity of their trading preference questionnaires and the ultimate uncertainty as to how their algorythm works exactly. Just my guess of course. But Optimark and VWAP have almost nothing in common outside of the anonymity feature and ATS status. Hope that is helpful. P.S. - Zeev - I have no clue as to the ultimate support or resistance levels - my guess is that ASTN will tread water between 9 and 11 until the next positive news hits, at which time it will spike another 3-10 points (or more) depending on how good the news is. For my part, I am indifferent, as I remain long term long for the time being.

To: wily who wrote (836)	5/8/1999 9:37:00 AM
From: Zeev Hed	Read Replies (1) \| Respond to of 4443

wily, it is inconceivable to me that two reports will be issued on the same trade, in the morning, "trade confirmation" which your understanding is just that the trade went through and after the close the actual pricing of the trade. My interpretation of "trade confirmation" (received by the institution prior to opening) is volume and price. Well I think that we will have to wait and see. But I must admit that such a system assumes a lot about human greed and fear that is not close to reality. Many larger funds provide now hourly valuation of their funds, and they will not be able to participate in the system or provide this information accurately unless they know before the close at what price the transaction has taken place. Zeev