Few questions on Selectnet orders: 1)If i selectnet preference a market maker to buy for a higher price than the current offer,is it possible to get filled and if it was a mistake on my part on keying the price, what's my recourse?And does that 100 share oversized order requirement apply only to orders where the market maker is at the inside price or even to this situation where im ordering higher than the current offer? 2)If i selectnet preference an ecn to buy for a higher price than its current offer,say $1.00 higher, will my order sweep all of that ecn's orders to fill me? Thanks in advance to anyone able to help.
Vinny, OK here goes. The oversize requirement applies to any MM whom you are preferenceing regardless of where they are quoting ie outside or at the inside price levels. If you pref a MM (oversized) say above the offer, he can elect to give you price improvement though there is no requirement that he do so (translation-don't count on it). If you price your order better than his quote (eg above his offer which may itself be above the inside offer) and pref him an oversized order, he would be obligated to fill you at his (better) price provided he had not already filled a similar order and/or changed his quote when your order came in. If you pref an ECN at a price better than the best match available within their book, the ecns will look for these matches and give you price improvement (except in some cases ARCA/REDI see below). However it should be noted that if the entire order cannot be filled immediately either at or better than your entered price,different ECN's will handle the balance differently. With ISLD, they will DISPLAY your order on the level 2 screen at the best bid to buy allowable with the minimum spread rule which would obviously be less than your higher unmatched offer. THen, if another ISLD seller goes to hit the bid, they would get price improvement by getting filled at your higher bid that was actually entered above the offer price. However with INCA, they actually CHANGE your order price to reflect this situation. EG any unmatched volume in your bid entered above the offer is changed in price to a tick below the offer (rounded down to display on the L2) waiting for a sell offer at the inside price to come in. If one does, then you will be filled at the better (lower) inside offer rather than your bid entered above the offer. However if an offer first comes in at YOUR entered offer price (higher than the inside price) you will still get filled at your original price since it constitutes a match. Finally, "smart" ECNs like ARCA/REDI will go outside their own books-even though matches within your limit price parameters may exist currently-and seek to get you price improvement from other sources ie other ECNs and ultimately MM's at the inside price via SuperSOES. THis is great in theory but can be frustrating in a fast moving stock when you would have preferred to just get the fill internally and give up potential price improvement. How is that for brain damage It is not the easiest to get down but is important to know regardless...hope it helps.
Vinny.. no.. to my knowledge you cant post to any ecn book on selectnet, only hit a bid/ask.. but why would you want to anyway? most brokers have direct connections to the main ecns.. -qwik
Vinny1, >If i selectnet preference a market maker to buy for a higher price than the current offer,is it possible to get filled Yes, it's possible. >if it was a mistake on my part on keying the price, what's my recourse? For erroneous trades you must notify Nasdaq within 30-minutes of execution time. >And does that 100 share oversized order requirement apply only to orders where the market maker is at the inside price or even to this situation where im ordering higher than the current offer? The +100 order rule is valid only during market hours. There is no +100 rule in remarket or afterhours. Dattrader explained about the ECNs. Imo, if ECNs are at inside market, instead of "Selectneting" them, it's better to route directly to the ECNs or use REDI/ARCA proactive feature. Fohat