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In a message dated 5/9/98 1:53:39 AM Eastern Daylight Time,
carson@xxxxxxxxxxxxxxx writes:
<< Every day, I see him and the other floor brokers struggle with this
problem. An order comes into their deck and is immediately pulled and then
put back. It is a royal pain in the ass for them. It interrupts the flow of
their business needlessly. Ultimately, it will affect the attention and
quality of the fill that that customer receives. If nothing else, they will
fill the order as quickly as they can without regard for the price. That is
called slippage and its how I make my living. I see it every day. A good
floor broker will work an order to get the best fill possible for his
customer. >>
Hi Jim,
Some of your points are valid, but others make no sense at all.
First we are talking about limit orders here, no one could change a market
order fast enough to prevent it from being filled, so how could a floor broker
disregard the price? In 5 yrs. of trading I have never had a limit order
filled at a better price and I'll bet no one else here has either. Even when
the market is moving very fast and the ask price drops below my limit I get
filled at the limit never below (I wonder who gets to keep the difference?)
Likewise, the bid/ask spread has no relevance to the buyer with a limit order.
Secondly, I find the notion that a changed order is "a royal pain
in the ass" to be ridicules. Look at it this way: if the bid/ask is 5 by 5
1/2, I would put a limit order in at 5 1/4. Now if the market moves up and
the bid ask becomes 5 3/4 by 6, I obviously will not get filled. I may decide
that I still want to get in and change my limit order to 5 7/8. Instead of
the floor broker complaining about paper work he should be THANKING ME for
helping him get a fill. Remember he does not get paid for a book full of
unfilled day only, limit orders!
<< Also, you seem to have a misconception as to what a floor broker
even is. They don't take orders at all, they execute orders for customers in
the trading pit. You may believe that this is no big deal, you couldn't be
further from the truth. It is a very difficult job which requires a great
deal of skill. Frankly, different brokers will have different bid/ask spreads
quoted them based on the perceptions of locals like myself as to how diligent
the broker will be in filling the order. >>
The only misconception seems to be WHO A BROKER WORKS FOR. All
brokers (real estate, yachts, stock, bonds ...) work for the person paying the
commission. As the person paying their salary I call the shots and if it is
in my best interest to change my order I have every right to do so, and they
can smile and thank me or I will take my 10-15 mulit-contract trades / week to
someone who will.
<<My advice? Be very careful as to the selection of your pit broker,
treat them with the respect due their profession, and work with them. I
guarantee you it will help with your fills. >>
I agree that that they deserve respect, that they work hard and
the best ones will work the hardest to get the best price, but most of us do
not get a choice in pit brokers only in the brokerage firms we deal with. We
rely on their professionalism, but must look out for out own interests first.
Good luck and good
trading,
Ray Raffurty
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