Tough question, looking for truth

[dc441711]

It is my experience that most prop traders assume that their trades are going straight from their computers to a specialist post, market maker or ECN. I have noticed things and believe I have evidence showing that this is not true. Further, this leads me to believe if there are day trading firms who are taking orders, which they self clear through their own software, and are, in essence running a bucket shop.

Am I nuts or are there, in fact, firms that do this? And what type of software has a middle person and which doesnt. I have worked in two places, which shall be nameless, and in my current position, there can be no doubt that my market orders linger forever and there was a dispute over an order I wanted busted and instead of having an inquiry done on the exchange, which I thought was the policy, someone affiliated with the software company merely offered her opinion that nothing could be done. Yet, I researched the issue and she is wrong and the issue cost me 500 dollars.

Thanks in advance

 

[uptik2000]

could be...but in my experience at two firms(one retail and one pro) the only time I have ever had a problem has been when I used a specific ECN(ARCA).
The pro firm I'm with now provides lightning fast executions. I'm not promoting them, I won't even name the firm...but sometimes after I make a trade it's unbelievable. "How can it be that fast?" I mean, how can my order go from my finger to an exchange and fill in less than one second? And I'm talking limit orders...I NEVER use market orders. And sometimes I'll be on the phone with another trader and they will be able to see my order almost instantly(so I know it's actually getting out there).

So maybe it is just the firm you work at, or maybe it's the fact that you are using market orders, or that you use ARCA.
Good luck.

 

[metal1]

many stocks have automatic execution up to a certain size. if the quote is there you get filled, which may explain the quick executions.

 

[Don Bright]

Sometimes I wish we could take the "other side" of our new traders trades....but of course, we don't. Of course, we don't self clear either. The old idea of a "bucket shop" always comes to mind when I hear about this.

I think with proper tape reading, following trades to the nyse is relatively easy, so your fears should be eased.

With the various routing methods changing all the time for OTC trades, and mostly for the better (except perhaps, Super Montage), I really wouldn't be able to comment.

I know that retail firms trade against their customers quite often, and do so with authorization from their customers.

If you find out more, please let us know.

Don

 

[Vinny1]

Originally posted by uptik2000
could be...but in my experience at two firms(one retail and one pro) the only time I have ever had a problem has been when I used a specific ECN(ARCA).

What has been your experience with ARCA? Can you point out some positives and negatives?

 

[Vinny1]

Don,i think Supermontage is changing for the better.Here is an example of what the screen will look like if you have the totalview package(same as current screen but with the addition of every MM and ECN that is at the top 5 price levels,as supposed to just showing their best bid and offer)...http://nasdaqtrader.com/trader/hottopics/mdd/totalviewdisp.pdf

 

[Don Bright]

The jury is still out regarding Super Montage ( I just don't like the idea of, once again, sending most ourders back to the nasdaq).

I spent some time with ARCA CEO, and we found the bug that bothers me a lot. We see "arca" on level2, but he sees both arca and the actual MM (when there is a MM vs. a "real" order on the ECN).

We hit what we think is a real order on the ECN, just to have it fade (because there is a breathing body monitoring the order), when they don't want the trade. We are all working on it, so everyone can see the "sub heirarchy"....

Don

 

[Speculator1929]

If Super montage gives price protection and time priority then it will be a big help. If not, its just another Nasdaq scam.

 

[uptik2000]

vinny-
some positives about ARCA are: reserve orders, stops on nasdaq, trailing stops(but that depends on your broker...my new one doesn't offer that..and I'm not happy about it)

some negatives are: sometimes the orders don't get executed even if you're inside...and they don't show on level2 sometimes..some people have said it's because arca is not a true ecn, but has traders that sometimes trade against you ..

 

[cashonly]

Originally posted by uptik2000

some negatives are: sometimes the orders don't get executed even if you're inside...and they don't show on level2 sometimes..some people have said it's because arca is not a true ecn, but has traders that sometimes trade against you ..

I've had situations where I directed the order specifically to ARCA and hit the bid and nothing happened. I had to call SLK and they called ARCA and then it got executed.

Hopefully, when ARCA and REDI merge, it will be the best of both worlds. I'd hate to see REDI with its instant execution disappear.