Silicon Investor - Bid /Ask Spreads - Market Manipulation

[Justinfo] Another tidbit: brokerages have this habit of holding orders placed until they m...

Justinfo — 9/11/2013 12:27:03 AM

Another tidbit: brokerages have this habit of holding orders placed until they match it with other clients and therefore earn double the commission. Specifically routing trades through NYSE allows for tape watching and if a fill is not executed, they will have to correct it.

And apparently some brokerages(I don't know which ones) sell this data to third parties, now I have no idea how it is being used but I suppose it's safe to assume its made profitable somehow :)

[Justinfo] Anyone around know how many market makers per equity? Is it dependent on shares ...

Justinfo — 9/10/2013 1:35:22 AM

Anyone around know how many market makers per equity? Is it dependent on shares outstanding?

[Justinfo] Hoping to revive this thread and get some current market mechanics discussions g...

Justinfo — 9/10/2013 1:20:42 AM

Hoping to revive this thread and get some current market mechanics discussions going.

I will start with what I found with illiquid equity options 6+ months out. Newly minted IPOs have a huge spread on options far out wrt time. It has been super frustrating trying to get a decent fill. Some of the techniques I use:
-put in a purchase limit order right at bid and let it sit for an hour after which I increase my limit order to half way between bid and ask, noticed my order executes right after in many cases.
-literally walk 1 contract at a time: the ask price often drops after a contract has been filled, so I get one contract order filled wait for the drop and place another order. If I intended to purchase 10 contracts I walk a few anywhere from 1-3 and place a order for the rest at or close to ask

Happy trading!