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Slippage is caused by more than a fast market. Quite often the guy at the other side is a Market Maker who usually knows more often than the person placing the order which direction the market will go in the next few ticks... a few ticks can turn
into a few bucks very quickly on Nasdaq. If you trade with the common discount brokers they sell order flow to MM's who are not obliged to take the other side of your trade even if you buy at his offer. Other discount brokers ie. Datek route your
orders to the best market and if this happens to be Selectnet, some brokers will use Selectnet broadcast orders. Since broadcast orders are not mandatory MM's are not obliged to take the other side of the trade even if you buy at their offer. So
if you want to mimize the games MM plays and move the odds in your favour you've got to go with those DAET systems that have Selectnet Preference and better yet SOES orders to be absolutely sure you get out when everything starts dropping,
eventhough it will not be at the best price.
Bing
> ------------------------------------------------------------------------
>
> Subject: Re: NASDAQ Slippage...
> Date: Mon, 07 Feb 2000 10:23:48 -0800
> From: Dennis Holverstott <dennis@xxxxxxxxxx>
> To: Omega List <omega-list@xxxxxxxxxx>
>
> > What's average slippage for a market order in the big nasdaq? Seems higher
> > than $100.
>
> Oh yeah. :-) You can't watch the bid/ask on the big ND but you can on
> the mini NQ. The spread is seldom less than one big point and often as
> high as 3 or 4. At $100/bigpoint on the big ND that could be $300-400 if
> you could get your order executed instantly. Add in the usual quote
> delays, order delays and a fast market and, well, you get the picture.
>
> -
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