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Robert,
Can't agree with you entirely on commissions. I always like to keep cost
and slippage to a minimum, wherever possible. Paying $10 as opposed to
several times that with brokers like Schwab can add up quickly --
particularly if you are going for 1/8 to 1/4 point-- either by choice or are
forced to do so by current Market conditions.
Just to clarify-- the bid/ask itself on Level II when I traded it was
generally accurate, but can change very quickly. Like 1/10 of a second
before you submitted your order -- the order is rejected, killed, and must
be re-submitted -- or worse yet, partially filled. Many times, I've seen
them vacate the bid just long enough to reject your order, then jump back again.
What is most deceptive is the size and the depth of the represented bid/ask
and inventory behind it. After you finish the book, I would suggest
contacting the authors or some current L2 trader and see if they have any
later information. When I was in that game, it was changing weekly.
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At 12:39 AM 11/1/98 -0600, you wrote:
>Ron I don't care about commissions never have cared about that but the
>point was about having level 2.
>From what I can tell the MM got the advantage and the bid ask can't be
>believed so why use it. Seems like it would just a distraction and a
>guessing game with level 2 and MM who has the advantage. If this is so then
>why not just forget level 2 and trade level 1. I'm reading the electronic
>day trader now so maybe tomorrow i will understand more. My attraction is
>the quick executions something that has frustrated me in futures. I am
>almost close to renting a seat and going up there to get the stupid
>executions. The futures are in the dark ages compared to stocks its almost
>ridiculous. Only cure is to trade longer time and hold them overnight and I
>don't like doing that. Maybe someday soon the commodity folks will catch up
>to the stocks but outcry has to go
>and if the foreign exchanges beat ours with electronic trading they will
>get my business. The exchanges need to quit suing people for staring
>electronic trading and hurry up. Saw a post that 100 points was average
>slippage for the S&P for 40 trades, that $10,000 dollars gone thats
>considered acceptable. Might be but not for me anymore the jerks, screw
>them I'll either come up there or trade something else the day of being
>raped is over for me.
>
>Robert
>
> Ron Augustine wrote:
>>
>>If you're looking for fast executions at a low cost-- Datek is probably your
>>best bet for $9.99 last time I checked. I haven't traded with them in over
>>a year, but they had an option to enter an order which would require a
>>confirmation screen --or-- if you're a real cowboy, they have a server that
>>will accept your order without confirmation. Datek also didn't trade
>>Options back then, but was planning to add them.
>>
>>When I was trading Level II, I had a Frame Relay link to NASDAQ that
>>executed a trade typically in 1/100th of a second, with a report back in 1
>>to 5 seconds. Datek generally provided the same execution in 3 to 5 seconds
>>over the Net-- which was more than sufficient. Dreyfus is also fast, but
>>requires a confirmation screen.
>>______________________________________
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