Go to Jeff Salisbury LWGate Home Page.From: "David Taggart" <dctag@mavericktrading.com>
Subject: RE: [CANSLIM] RINO and general execution of trades
Date: Wed, 23 Oct 2002 00:21:39 -0600
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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
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<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>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 1/16<sup>th</sup> to 1/4<sup>th</sup> 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 1/8<sup>th</sup> and =
1/4<sup>th</sup>
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.</span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'> </span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>Happy Trading,</span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'>David Taggart</span></font></p>
<p class=3DMsoNormal><font size=3D2 color=3Dnavy face=3DArial><span =
style=3D'font-size:
10.0pt;font-family:Arial;color:navy'> </span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DTahoma><span
style=3D'font-size:10.0pt;font-family:Tahoma'>-----Original =
Message-----<br>
<b><span style=3D'font-weight:bold'>From:</span></b>
owner-canslim@lists.xmission.com =
[mailto:owner-canslim@lists.xmission.com] <b><span
style=3D'font-weight:bold'>On Behalf Of </span></b>Tom Worley<br>
<b><span style=3D'font-weight:bold'>Sent:</span></b> Tuesday, October =
22, 2002
9:24 PM<br>
<b><span style=3D'font-weight:bold'>To:</span></b> =
canslim@lists.xmission.com<br>
<b><span style=3D'font-weight:bold'>Subject:</span></b> Re: [CANSLIM] =
RINO and
general execution of trades</span></font></p>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> </span></font></p>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3DArial><span
style=3D'font-size:12.0pt;font-family:Arial'>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.</span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> </span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>----- Original Message =
- ----- </span></font></p>
<div style=3D'font-color:black'>
<p class=3DMsoNormal =
style=3D'margin-left:.5in;background:#E4E4E4'><b><font size=3D2
face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>From:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:Chazmoore@aol.com" =
title=3D"Chazmoore@aol.com">Chazmoore@aol.com</a>
</span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>To:</span><=
/font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> <a
href=3D"mailto:canslim@lists.xmission.com" =
title=3D"canslim@lists.xmission.com">canslim@lists.xmission.com</a>
</span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Sent:</span=
></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> Tuesday,
October 22, 2002 4:31 PM</span></font></p>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><b><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial;font-weight:bold'>Subject:</s=
pan></font></b><font
size=3D2 face=3DArial><span =
style=3D'font-size:10.0pt;font-family:Arial'> Re: [CANSLIM]
RINO and general execution of trades</span></font></p>
</div>
</div>
<div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D3 =
face=3D"Times New Roman"><span
style=3D'font-size:12.0pt'> </span></font></p>
</div>
<p class=3DMsoNormal style=3D'margin-left:.5in'><font size=3D2 =
face=3DArial><span
style=3D'font-size:10.0pt;font-family:Arial'>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. <br>
<br>
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? <br>
Charley</span></font><font face=3DArial><span =
style=3D'font-family:Arial'> </span></font></p>
</div>
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Next Article (by Subject): RE: [CANSLIM] RINO and general execution of trades "Mike Gibbons"
Previous Article (by Subject): Re: [CANSLIM] RINO and general execution of trades Mendheart@aol.com
Top of Thread: Re: [CANSLIM] RINO and general execution of trades "Tom Worley"
Next in Thread: RE: [CANSLIM] RINO and general execution of trades "Mike Gibbons"
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