From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #3002 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Wednesday, October 23 2002 Volume 02 : Number 3002 In this issue: Re: [CANSLIM] RINO and general execution of trades Re: [CANSLIM] RINO and general execution of trades Re: [CANSLIM] RINO and general execution of trades Re: [CANSLIM] CECO and COCO [CANSLIM] Rino and trade executions--follow up Re: [CANSLIM] RINO and general execution of trades RE: [CANSLIM] RINO and general execution of trades RE: [CANSLIM] RINO and general execution of trades ---------------------------------------------------------------------- Date: Tue, 22 Oct 2002 20:12:44 -0700 (PDT) From: James Bond Subject: Re: [CANSLIM] RINO and general execution of trades Hi. Whenever something like this happens to me I always look for ways to improve the situation from my side rather than simply blame the broker (and yes they're crooked and it hasn't changed in over 100 years). Since the best breakouts often takes minutes to zip past the pivot, never, ever, check the chart when a breakout is taking place. Do it before hand. Prepare two watchlists, one with pp defined and updated everyday, one without pp defined and updated weekly. Stocks on the list with pp defined should be ones that you're ready (and willing) to buy in a second - you've already examined the weekly, daily and intraday charts the night before, so the only thing left to do is to check the pp and ADV then buy. Alternatively, one can use buy stops. I used buy stops to buy both RINO and SHFL. RINO seemed to have worked out better. The buy stop was placed at 16.15, 10 cents above 16.05 which was the mini handle high on the intraday chart. It was filled at 16.45. The buy stop for SHFL was placed at 22.71 and filled at 22.75. There was a short consolidation that looked like a handle but now that the stock is paying no respect to the pp I'm starting to question whether that was a valid handle. I often found that my fills were much better with stop buy orders than (the occasional) buy orders that I put in at the moment of breakout. - --- Jerome Buckmelter wrote: > Hi! Although I have been a student of canslim for > two years, and have > watched this board in the past, this is my first > post. First of all, I > am really impressed by some of the commentary I've > read herein, and hope > that my question will not be too elementary or off > the (canslim) mark. > Perhaps others have experienced a similar situation > to the one that I > did, and could give me some advice. On October 17 > RINO broke out. I > saw it pass the pivot of 16.25 and climb quickly. > By the time I checked > the volume, re-checked the chart, and got set up on > my brokerage firm's > website to make the trade, the real time quote > window showed a price of > around $16.80!! A quick math check indicated that I > would still be > about 3.3 % above the pivot. Still OK, so I made > the trade. I > immediately confirmed the purchase price, and it was > $17.16! -- 5.5% > above the pivot! I quickly clicked the real time > quote button: the > price and bid/ask didn't change! They were still in > the $16.80 range! > Somehow I got stuck with shares that were about 35 > cents (2.2%) above > the going rate. I kept checking the real time quote > for the next few > minutes, and it still remained around 16.80 or a > little lower. I talked > to the brokerage firm, and they said I got caught in > a momentary > "upspike"-just a tough break. Why the price surged > up dramatically for > a few moments and didn't remain elevated, they could > not adequately > explain. My concern is this: is this situation the > result of having > this particular broker? (By the way, I had a very > similar situation > with them several months ago, but shrugged it off). > Could I have > avoided this if I had another broker? Would it be > prudent to adjust my > sell point accordingly since there is a good chance > that I will be > shaken out as things now stand? Thanks, > > Buck > __________________________________________________ Do you Yahoo!? Y! Web Hosting - Let the expert host your web site http://webhosting.yahoo.com/ - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Oct 2002 23:23:13 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] RINO and general execution of trades This is a multi-part message in MIME format. - ------=_NextPart_000_0056_01C27A21.FE007EF0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Hi Buck, I will offer a late (and different, as I am prone to do) point = of view. First, I suspect you may have been executed in what I term "off = exchange", such as thru Island, where the spread is much larger due = lower volume. Second, checking and rechecking live quotes was not the right tactic, = you should have immediately checked for the high / low of the day. If = the high being printed was not at least close to your execution, = complain immediately, definitely on trade date. I looked at DGO and it = shows the high for that date ended up being 17.40, but I have no way = easily from home of checking when it traded that price. Third, you indicate that you expect to get shaken out, but I see no = pending evidence of that.=20 Fourth, NASDAQ requires that the highest bid and lowest offer be = presented to the market. But this only applies to "market" orders. If = you put any condition on your order, then your execution comes after all = market orders. Some conditions, such as AON (All or None) can easily = cost you a premium price. Assuming your order was a market order, then you should expect to pay = the offering price. But your brokerage firm cannot take the spread, or = part of it, unless they are a market maker, and are taking the risks of = being a market maker. However, they can short sell the shares to you, = then attempt to cover their short from the marketplace, without actually = being a market maker to the best of my belief. But that still would mean = you would have been executed at the offer, not over the offer. Likewise, = if the size of your order was substantial, then you might well be = executed away from the market pricing in order to fill the complete = order. - ----- Original Message -----=20 From: Jerome Buckmelter=20 To: CANSLIM-posts=20 Sent: Tuesday, October 22, 2002 3:06 PM Subject: [CANSLIM] RINO and general execution of trades Hi! Although I have been a student of canslim for two years, and have = watched this board in the past, this is my first post. First of all, I = am really impressed by some of the commentary I've read herein, and hope = that my question will not be too elementary or off the (canslim) mark. = Perhaps others have experienced a similar situation to the one that I = did, and could give me some advice. On October 17 RINO broke out. I = saw it pass the pivot of 16.25 and climb quickly. By the time I checked = the volume, re-checked the chart, and got set up on my brokerage firm's = website to make the trade, the real time quote window showed a price of = around $16.80!! A quick math check indicated that I would still be = about 3.3 % above the pivot. Still OK, so I made the trade. I = immediately confirmed the purchase price, and it was $17.16! -- 5.5% = above the pivot! I quickly clicked the real time quote button: the = price and bid/ask didn't change! They were still in the $16.80 range! = Somehow I got stuck with shares that were about 35 cents (2.2%) above = the going rate. I kept checking the real time quote for the next few = minutes, and it still remained around 16.80 or a little lower. I talked = to the brokerage firm, and they said I got caught in a momentary = "upspike"-just a tough break. Why the price surged up dramatically for = a few moments and didn't remain elevated, they could not adequately = explain. My concern is this: is this situation the result of having = this particular broker? (By the way, I had a very similar situation = with them several months ago, but shrugged it off). Could I have = avoided this if I had another broker? Would it be prudent to adjust my = sell point accordingly since there is a good chance that I will be = shaken out as things now stand? Thanks, =20 Buck =20 - ------=_NextPart_000_0056_01C27A21.FE007EF0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi Buck, I will offer a late (and different, as = I am prone=20 to do) point of view.
 
First, I suspect you may have been executed in = what I term=20 "off exchange", such as thru Island, where the spread is much larger due = lower=20 volume.
 
Second, checking and rechecking live quotes was = not the=20 right tactic, you should have immediately checked for the high / low of = the day.=20 If the high being printed was not at least close to your execution, = complain=20 immediately, definitely on trade date.  I looked at DGO and it = shows the=20 high for that date ended up being 17.40, but I have no way easily from = home of=20 checking when it traded that price.
 
Third, you indicate that you expect to get = shaken out, but=20 I see no pending evidence of that.
 
Fourth, NASDAQ requires that the highest bid and = lowest=20 offer be presented to the market. But this only applies to "market" = orders. If=20 you put any condition on your order, then your execution comes after all = market=20 orders. Some conditions, such as AON (All or None) can easily cost you a = premium=20 price.
 
Assuming your order was a market order, then you = should=20 expect to pay the offering price. But your brokerage firm cannot take = the=20 spread, or part of it, unless they are a market maker, and are taking = the risks=20 of being a market maker. However, they can short sell the shares to you, = then=20 attempt to cover their short from the marketplace, without actually = being a=20 market maker to the best of my belief. But that still would mean you = would have=20 been executed at the offer, not over the offer. Likewise, if the size of = your=20 order was substantial, then you might well be executed away from the = market=20 pricing in order to fill the complete order.
 
----- Original Message -----=20
From: Jerome=20 Buckmelter
Sent: Tuesday, October 22, 2002 3:06 PM
Subject: [CANSLIM] RINO and general execution of = trades

Hi!  Although I have been a student = of canslim for two years, and have watched this board = in the=20 past, this is my first post.  = First=20 of all, I am really impressed by some of the commentary I=92ve read = herein, and=20 hope that my question will not be too elementary or off the (canslim) mark. =20 Perhaps others have experienced a similar situation to the one = that I=20 did, and could give me some advice. =20 On October 17 RINO broke out. =20 I saw it pass the pivot of 16.25 and climb quickly.  By the time I checked the = volume,=20 re-checked the chart, and got set up on my brokerage firm=92s website to = make the=20 trade, the real time quote window showed a price of around $16.80!!  A quick math check indicated = that I=20 would still be about 3.3 % above the pivot.  Still OK, = so I made=20 the trade.  I = immediately=20 confirmed the purchase price, and it was $17.16! -- 5.5% above the = pivot!   I quickly clicked the = real time=20 quote button: the price and bid/ask didn=92t change!  They were still in the $16.80=20 range!  Somehow I got = stuck with=20 shares that were about 35 cents (2.2%) above the going rate.  I kept checking the real time = quote for=20 the next few minutes, and it still remained around 16.80 or a little = lower.  I talked to the brokerage = firm, and they=20 said I got caught in a momentary =93upspike=94=97just a=20 tough break.  Why the = price surged=20 up dramatically for a few moments and didn=92t remain elevated, they = could not=20 adequately explain.  My = concern is=20 this: is this situation the result of having this particular = broker?  (By the way, I had a very = similar=20 situation with them several months ago, but shrugged it off).  Could I have avoided this if I = had=20 another broker?  Would it = be prudent=20 to adjust my sell point accordingly since there is a good chance that I = will be=20 shaken out as things now stand? =20 Thanks,

 

Buck =20

- ------=_NextPart_000_0056_01C27A21.FE007EF0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Oct 2002 23:24:26 -0400 From: "Tom Worley" Subject: Re: [CANSLIM] RINO and general execution of trades This is a multi-part message in MIME format. - ------=_NextPart_000_0060_01C27A22.29BA30E0 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable I believe this would be entirely illegal, and likely to cause the Broker = Dealer to quickly go out of business, altho by then likely wouldn't have = any customers left anyway. - ----- Original Message -----=20 From: Chazmoore@aol.com=20 To: canslim@lists.xmission.com=20 Sent: Tuesday, October 22, 2002 4:31 PM Subject: Re: [CANSLIM] RINO and general execution of trades Buck: Excellent question. I have found myself in similar situations and = have wondered how I was taken. Maybe some of the insiders on the board = will venture a guess. Here is my guess.=20 If you are dealing through a discount broker and are enjoying some of = the $7.00 or $10.00 transaction costs, it is possible your broker has a = deal with a market maker wherein you pay at the highest bid while your = broker buys at a lower price and splits the difference with the market = maker. I have been told this is how some discount brokers can provide = such low acquisition costs. Anyone know for sure?=20 Charley - ------=_NextPart_000_0060_01C27A22.29BA30E0 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
I believe this would be entirely illegal, and = likely to=20 cause the Broker Dealer to quickly go out of business, altho by then = likely=20 wouldn't have any customers left anyway.
 
----- Original Message -----=20
From: Chazmoore@aol.com=20
Sent: Tuesday, October 22, 2002 4:31 PM
Subject: Re: [CANSLIM] RINO and general execution of=20 trades

Buck: = Excellent question.=20 I have found myself in similar situations and have wondered how I was = taken.=20 Maybe some of the insiders on the board will venture a guess. Here is my = guess.=20

If you are dealing through a discount broker and are enjoying = some of=20 the $7.00 or $10.00 transaction costs, it is possible your broker has a = deal=20 with a market maker wherein you pay at the highest bid while your broker = buys at=20 a lower price and splits the difference with the market maker. I have = been told=20 this is how some discount brokers can provide such low acquisition = costs. Anyone=20 know for sure?
Charley - ------=_NextPart_000_0060_01C27A22.29BA30E0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Oct 2002 20:30:50 -0700 (PDT) From: James Bond Subject: Re: [CANSLIM] CECO and COCO If someone were really following CANSLIM, he/she should have largely avoided the school stocks. When everyone was so excited by the kukoo's, I looked hard but couldn't find a reason to buy them. Most of the stocks in this group had three strikes against them: 1. Late stage bases; 2. extremely high institutional ownership (remember that "I" stands for reasonable ownship - below 50%); and 3. unfavorable insider actions. Of all the major shool stocks only EDMC was marginally buyable. So I looked at the smaller stocks and found CCDC and WIX which looked much better. Unfortunately (or fortunately) CCDC brokeout before the market was ready, and WIX never made a move. It's interesting that CCDC did not move in sympathy with the group and made a new high today. __________________________________________________ Do you Yahoo!? Y! Web Hosting - Let the expert host your web site http://webhosting.yahoo.com/ - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Oct 2002 21:45:30 -0700 From: "Jerome Buckmelter" Subject: [CANSLIM] Rino and trade executions--follow up This is a multi-part message in MIME format. - ------=_NextPart_000_0001_01C27A14.74CC8410 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Thanks folks for the input. I originally suspected that my online broker could have done a better job, but the consensus is that I shouldn't blame my broker; instead I should concentrate on trading quicker, especially when placing market orders with thinly traded, fast-moving stocks. However, before making a move I'm really careful about re-checking the chart and other things since last year I jumped into a stock that I thought it was surging above its pivot on huge volume, whereas it was, in fact, plunging from its intraday high. I got shaken out in six minutes (down 8%)! My online broker is a major broker who charges $29.95 a trade. I don't mind paying that much per trade if I can get a quick and good execution, because bad executions can cost you much more. But paying more in commission, for me, does not seem to guarantee quick trades (unlike Duke's experience). Thanks again for the input. - ------=_NextPart_000_0001_01C27A14.74CC8410 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

Thanks folks for the input.  I originally suspected that my = online broker could have done a better job, but the consensus is that I = shouldn’t blame my broker; instead I should concentrate on trading quicker, = especially when placing market orders with thinly traded, fast-moving stocks. = However, before making a move I’m really careful about re-checking the = chart and other things since last year I jumped into a stock that I thought it was surging above its pivot on huge volume, whereas it was, in fact, = plunging from its intraday high.  I got = shaken out in six minutes (down 8%)!   My online broker is a major broker who charges $29.95 a trade.  I don’t mind paying that = much per trade if I can get a quick and good execution, because bad executions = can cost you much more.  But paying = more in commission, for me, does not seem to guarantee quick trades (unlike = Duke’s experience).  Thanks again = for the input.   

- ------=_NextPart_000_0001_01C27A14.74CC8410-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Wed, 23 Oct 2002 02:11:44 EDT From: Mendheart@aol.com Subject: Re: [CANSLIM] RINO and general execution of trades I must ditto Duke's experience with Harris Direct...despite several consolidations, I believe Harris has provided a seamless transition and effective transactions. 'Tis true, you pay a little higher commission in exchange for better execution. mendheart@aol.com (Denny) - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Wed, 23 Oct 2002 00:21:39 -0600 From: "David Taggart" Subject: RE: [CANSLIM] RINO and general execution of trades This is a multi-part message in MIME format. - ------=_NextPart_000_0009_01C27A2A.283C70E0 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit A lot of online brokers use market maker firms and get what is called payment for order flow. Basically the market maker is guaranteed the spread that is one of the main reasons a lot of the online brokers did and some still do charge extra for limit orders. It does not cost them extra out of pocket to do a limit order but it does cost payment for order flow. Check out NITE they were and are one of the biggest MM firms and you can see what decimalization and less online trading has done to their stock price. Decimals killed a lot of MM firms that didn't know how to trade but took order flow instead because when you used to get anywhere from a 1/16th to 1/4th each trade and now you get a lot of $.01 and $.02 spreads the money just isn't there like it used to be. Anybody that used to scalp for 1/8th and 1/4th know that the scalp game left town last year with the decimals. But returning to the reason for the post Yes, brokers use payment for order flow to get more money. That is one of the biggest selling points of direct access brokerage firms you trade with whatever route you want. Happy Trading, David Taggart - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley Sent: Tuesday, October 22, 2002 9:24 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] RINO and general execution of trades I believe this would be entirely illegal, and likely to cause the Broker Dealer to quickly go out of business, altho by then likely wouldn't have any customers left anyway. - ----- Original Message ----- From: Chazmoore@aol.com To: canslim@lists.xmission.com Sent: Tuesday, October 22, 2002 4:31 PM Subject: Re: [CANSLIM] RINO and general execution of trades Buck: Excellent question. I have found myself in similar situations and have wondered how I was taken. Maybe some of the insiders on the board will venture a guess. Here is my guess. If you are dealing through a discount broker and are enjoying some of the $7.00 or $10.00 transaction costs, it is possible your broker has a deal with a market maker wherein you pay at the highest bid while your broker buys at a lower price and splits the difference with the market maker. I have been told this is how some discount brokers can provide such low acquisition costs. Anyone know for sure? Charley - ------=_NextPart_000_0009_01C27A2A.283C70E0 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

A lot of online brokers use market = maker firms and get what is called payment for order flow.  Basically the = market maker is guaranteed the spread that is one of the main reasons a lot of = the online brokers did and some still do charge extra for limit = orders.  It does not cost them extra out of pocket to do a limit order but it does = cost payment for order flow.  Check out NITE  they were and are one = of the biggest MM firms and you can see what decimalization and less online = trading has done to their stock price.  Decimals killed a lot of MM firms = that didn’t know how to trade but took order flow instead because when you used to = get anywhere from a 1/16th to 1/4th each trade and now = you get a lot of $.01 and $.02 spreads the money just isn’t there like = it used to be.  Anybody that used to scalp for 1/8th and = 1/4th know that the scalp game left town last year with the decimals.  = But returning to the reason for the post Yes, brokers use payment for order = flow to get more money.  That is one of the biggest selling points of = direct access brokerage firms you trade with whatever route you = want.

 

Happy Trading,

David Taggart

 

-----Original = Message-----
From: owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com] On Behalf Of Tom Worley
Sent: Tuesday, October = 22, 2002 9:24 PM
To: = canslim@lists.xmission.com
Subject: Re: [CANSLIM] = RINO and general execution of trades

 

I believe this would be = entirely illegal, and likely to cause the Broker Dealer to quickly go out of = business, altho by then likely wouldn't have any customers left = anyway.

 

----- Original Message = - -----

Sent: Tuesday, October 22, 2002 4:31 PM

Subject: Re: [CANSLIM] RINO and general execution of trades

 

Buck: Excellent question. I = have found myself in similar situations and have wondered how I was taken. = Maybe some of the insiders on the board will venture a guess. Here is my = guess.

If you are dealing through a discount broker and are enjoying some of = the $7.00 or $10.00 transaction costs, it is possible your broker has a deal with = a market maker wherein you pay at the highest bid while your broker buys = at a lower price and splits the difference with the market maker. I have been = told this is how some discount brokers can provide such low acquisition = costs. Anyone know for sure?
Charley

- ------=_NextPart_000_0009_01C27A2A.283C70E0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Tue, 22 Oct 2002 21:11:26 -1000 From: "Mike Gibbons" Subject: RE: [CANSLIM] RINO and general execution of trades This is a multi-part message in MIME format. - ------=_NextPart_000_0009_01C27A0F.951B7D20 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable X-MIME-Autoconverted: from 8bit to quoted-printable by pluto.wwwnexus.com id g9N8JOb21428 For what it's worth, I use RJT. It's a no frills service, but I find thei= r default execution very satisfacory - it seems to be instanteneous in most cases. I could get sophisticated and direct the tra= de to a particular ECN for execution, but I don't find that necessary. It also links seamlessly with quotetracker, which is the best = piece of free software I've ever seen. Aloha, Mike Gibbons Proactive Technologies, LLC http://www.proactech.com -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmis= sion.com]On Behalf Of David Taggart Sent: Tuesday, October 22, 2002 8:22 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] RINO and general execution of trades A lot of online brokers use market maker firms and get what is called p= ayment for order flow. Basically the market maker is guaranteed the spread that is one of the main reasons a lot of the online= brokers did and some still do charge extra for limit orders. It does not cost them extra out of pocket to do a limit order bu= t it does cost payment for order flow. Check out NITE they were and are one of the biggest MM firms and you can see what decima= lization and less online trading has done to their stock price. Decimals killed a lot of MM firms that didn=92t know how to trade= but took order flow instead because when you used to get anywhere from a 1/16th to 1/4th each trade and now you get a lot of $.01 = and $.02 spreads the money just isn=92t there like it used to be. Anybody that used to scalp for 1/8th and 1/4th know that the scalp g= ame left town last year with the decimals. But returning to the reason for the post Yes, brokers use payment for order flow to get= more money. That is one of the biggest selling points of direct access brokerage firms you trade with whatever route you want. Happy Trading, David Taggart -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmis= sion.com] On Behalf Of Tom Worley Sent: Tuesday, October 22, 2002 9:24 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] RINO and general execution of trades I believe this would be entirely illegal, and likely to cause the Broke= r Dealer to quickly go out of business, altho by then likely wouldn't have any customers left anyway. ----- Original Message ----- From: Chazmoore@aol.com To: canslim@lists.xmission.com Sent: Tuesday, October 22, 2002 4:31 PM Subject: Re: [CANSLIM] RINO and general execution of trades Buck: Excellent question. I have found myself in similar situations and= have wondered how I was taken. Maybe some of the insiders on the board will venture a guess. Here is my guess. If you are dealing through a discount broker and are enjoying some of t= he $7.00 or $10.00 transaction costs, it is possible your broker has a deal with a market maker wherein you pay at the highest bid = while your broker buys at a lower price and splits the difference with the market maker. I have been told this is how some disco= unt brokers can provide such low acquisition costs. Anyone know for sure? Charley - ------=_NextPart_000_0009_01C27A0F.951B7D20 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
For=20 what it's worth, I use RJT. It's a no frills service, but I find their = default=20 execution very satisfacory - it seems to be instanteneous in most cases. = I could=20 get sophisticated and direct the trade to a particular ECN for = execution, but I=20 don't find that necessary. It also links seamlessly with quotetracker, = which is=20 the best piece of free software I've ever seen.
 
Aloha,
 
Mike = Gibbons
Proactive = Technologies,=20 LLC
http://www.proactech.com
-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of David=20 Taggart
Sent: Tuesday, October 22, 2002 8:22 = PM
To:=20 canslim@lists.xmission.com
Subject: RE: [CANSLIM] RINO and = general=20 execution of trades

A lot of = online=20 brokers use market maker firms and get what is called payment for = order=20 flow.  Basically the market maker is guaranteed the spread that = is one of=20 the main reasons a lot of the online brokers did and some still do = charge=20 extra for limit orders.  It does not cost them extra out of = pocket to do=20 a limit order but it does cost payment for order flow.  Check out = NITE  they were and are one of the biggest MM firms and you can = see what=20 decimalization and less online trading has done to their stock = price. =20 Decimals killed a lot of MM firms that didn=92t know how to trade but = took order=20 flow instead because when you used to get anywhere from a = 1/16th to=20 1/4th each trade and now you get a lot of $.01 and $.02 = spreads the=20 money just isn=92t there like it used to be.  Anybody that used = to scalp=20 for 1/8th and 1/4th know that the scalp game = left town=20 last year with the decimals.  But returning to the reason for the = post=20 Yes, brokers use payment for order flow to get more money.  That = is one=20 of the biggest selling points of direct access brokerage firms you = trade with=20 whatever route you want.

 

Happy=20 Trading,

David=20 Taggart

 

-----Original=20 Message-----
From:=20 owner-canslim@lists.xmission.com = [mailto:owner-canslim@lists.xmission.com]=20 On Behalf Of Tom=20 Worley
Sent: = Tuesday, October=20 22, 2002 9:24 PM
To:=20 canslim@lists.xmission.com
Subject: Re: [CANSLIM] RINO and = general=20 execution of trades

 

I believe this would be = entirely=20 illegal, and likely to cause the Broker Dealer to quickly go out of = business,=20 altho by then likely wouldn't have any customers left=20 anyway.

 

----- Original Message = - -----=20

From: Chazmoore@aol.com=20

To: canslim@lists.xmission.com= =20

Sent: Tuesday,=20 October 22, 2002 4:31 PM

Subject: Re:=20 [CANSLIM] RINO and general execution of = trades

 

Buck: Excellent = question. I have=20 found myself in similar situations and have wondered how I was taken. = Maybe=20 some of the insiders on the board will venture a guess. Here is my = guess.=20

If you are dealing through a discount broker and are enjoying = some of=20 the $7.00 or $10.00 transaction costs, it is possible your broker has = a deal=20 with a market maker wherein you pay at the highest bid while your = broker buys=20 at a lower price and splits the difference with the market maker. I = have been=20 told this is how some discount brokers can provide such low = acquisition costs.=20 Anyone know for sure?
Charley =

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