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I'm familiar with SOES, et al. SOES of course is out because it's NASDAQ and limited
to 500 shares, unless Mayer Schweitzer(Schwab's MM) wanted to bother with 4 trades,
of course. SelectNet is also out---NASDAQ.
As far as the third market is concerned, what you are suggesting is that someone else
got burnt by trading on the P-Coast, for example. That is to say...I put an order to
sell BA at the market when the market was 49x49.25 in NY and got done in California at
48. That means I did not get the best bid....I can bust that trade...
But anyway...the point that had been made was, time and sales did not justify any
trades in the advertised price range nearby the time of the post. I realise you can get
late ticks....past 3 minutes....but you can't get early ticks. If I told you I got
filled at 48 at 2 PM but the last fill at 48 was at 12 PM and it has been trading from
49 to 50 since 1 PM......?
Anyway, it's nothing between you and me...or between me and anyone here...but please
don't post anything to me about Don, I am replying because I don't wish to be
discourteous, but I have 3 other fellows that I have put off replying to only because
this entire issue just wastes our time, no?
--PJS
>
> I believe that there is a general misunderstanding concerning how some
> of these trades work, both on NASDAQ and NYSE stocks. In my firm, we
> have a Instinet, Selectnet, SuperDOT, SOES, Island, and Bloomberg amoung
> other methods to place trades. If a brokerage house trading room can
> get a better price fill on a third market (ie, Boston, Philly, Pacific,
> Chicago, NASDAQ, etc.), then they will pick off that order, fill it, and
> give a "price" improvement to the customer if it is in the best iterest
> of the trading firm. Charles Schwab is one of the largest independent
> market making and 3rd market brokers in the country. If the firm can
> buy BA at 60 via their internal traders, sell it to Don Green at 60 1/8,
> and that price is better than the best offer at the time of 60 1/4, so
> be it.
>
> Likewise, with internal order flow that Schwab has, they may have had a
> large order to sell "at the market" from an institution, but to "lay
> off" the stock and not drive down the price, they sold it piece meal out
> to incoming orders. Again, it looks like a "price improvement" to the
> customer, but if a 100,000 share order hit the NYSE, BA might drop a
> full point before the trade was accomplished. Without being able to
> inspect the full time and sales, best bid and best ask, and time of day
> to within one minute, it is difficult to judge how the trade went off.
> Likewise, the time reported by Schwab to the customer may not be the
> time that the trade actually took place, but the SEC permits trades to
> be "slipped" in time up to 3 minutes. I know, because I have used
> another major firm and they sometimes pick off parts of my trades, give
> apparent "price improvement", but as I watch time and sales the NYSE
> trade really takes place in Chicago or Boston depending upon the stock.
> If I can save a 1/8 of a point going in and coming out, and they make
> money, so be it.
>
> Good luck and make a million
>
> R Tareilo
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