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Jeff Hudis wrote:
> Can someone please explain what the Short Order Execution System is and
> why it is so fast. I trade stocks by computer from my home and
> understand that the SOES "bandits" are way ahead of everyone else on
> executions etc. I have this image of these "boiler rooms" of traders
> who pay a fee to be there taking eights, quarters and halfs all day.
> Please explain.
Actually, SOES stands for Small Order Execution System. Normally, MM's
have the option to accept or decline fills, even though they may post a bid
or ask. What SOES does is allows the trader to hit a MM with an order of
1000 shares or less without the MM having this option. Thus, execution is
instant. Having the capability to execute with SOES does not mean that one
is necessarily a SOES-type scalper (going for a few teenies only). This
tool can be used by any trader with direct to market capabilities, which
are available for remote trading as well as through "boiler rooms". These
systems not only have SOES, but other execution vehicles as well, which
allow for Nasdaq orders to be filled pretty much instantaneously. As well,
they offer access to listed stocks through Superdot (NYSE electronic
trading for 1000 shares or less). The combination software and clearing
operations are offered by such firms as Cyber-Corp, A.B. Watley, Terra
Nova, Harbor, MB Trading, and Broadway. Some are based upon the RealTick3
platform, while others (such as Cyber) have their own proprietary
software. If you are an active trader (say, 50 or more tickets a month),
it's definitely worth your while to check this out. Overall, your fills
will not only be faster with this stuff, but better as well.
BTW, I'm not associated in any way with any of these firms - just a
satisfied user. I can tell you that once you get a taste of going direct,
you will shudder at the thought of going back to the amateur stuff.
Regards,
A.J.
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