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Www Foreign Exchange Trader Tag Easy Forex Trading Signal Foreign Exchange Trader Trading Nasdaq & NYSE-●●相拥●夕桥●●-我的搜狐

Www Foreign Exchange Trader Tag Easy Forex Trading Signal Foreign Exchange Trader

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§ this book displays the limit orders (bids and offers) – market orders are not displayed

o This allows you to see all bids and offers placed by all traders – even when it results in a locked or crossed market

o The NYSE indicator tells us where the specialist may be printing – in essence, it adds the limit and market orders in the market to indicate where the best price may be

Order filling is not necessarily first come, first served, but with new regulations and electronic order processing, favourtism happens much less frequently than it did years ago.

The NYSE and AMEX are examples of auction markets.

AUCTION MARKETS

An auction market is run by a specialist.  The specialist is employed to keep an orderly flow to the market.  They are highly knowledgeable about the stock(s) they trade.

In simplest terms, the specialist matches up buy and sell orders as they enter what is called “The Specialist’s Book.”  If there is no matching order, the specialist may opt to buy/sell a quantity of stock.

Remember: The specialist’s primary responsibility is to keep an orderly market.

DEALER MARKETS

In a dealer market, orders are filled through market makers and ECNs.

NASDAQ is the primary dealer market in the world.

§ Any other Over-the-counter market is also a dealer market

§ An OTC market is one in which securities are traded through telephone or computer network

Unlike an auction market where there is only one specialist per stock, there are many market makers per stock in a dealer market.

Market Makers

A market maker is a trader employed by a financial institution to manage the company’s inventory of a particular security. They maintain their inventory and use it to make money for the company by buying and selling on the market.

A market maker’s primary responsibility is to provide liquidity to the market – to literally make the market – they are there to provide a flowing market while following the rules as set out by the NASD and SEC.

Market makers are like prop-traders

§ The difference between MMs and traders at Swift Trade is that market makers have more money and more experience

o The MMs that are the most powerful on a particular security are called the AXE

§ They have the same goal as prop traders – to make money trading full time

Market makers used to keep spreads wide and make money off buying at the bid and selling at the ask. Today, their main source of revenue comes from commissions.

Market makers are responsible for the NASDAQ’s official opening price on securities – they can gap stocks up or down as they see fit if they have market order outstanding from the previous night.

The NASD has placed 5 specific restriction on Market Makers:

1.   They must fill orders (bids, offers, buys, and sells) on a first come, first serve basis.

2.   They cannot fill orders pre or post market hours.

3.   They cannot back away from a level 1 price. (requires more detail)

4.   They cannot buy through an advertised price

5.   They must appear on both sides of the level 2 between 930am and 4pm.

Market makers have 3 responsibilities (in order of importance) that the SEC requires them to uphold:

1.   Buy and sell what the public wants

a.   This refers to retail clients – your average investing customer

2.   Fill institutional orders

a.   Mutual funds, pension funds, etc

3.   Trade the house account when they are not doing 1 or 2

The reasoning for the above 3 responsibilities comes from the market makers’ source of income.

§ They earn the least from retail clients – the commissions are small and so are the orders

§ The company earns the most in commissions from the institutions – they pay a premium for a top trader to execute their orders

§ The market maker – the person – makes the most from earning money on the house account

Without those responsibilities ordered the way they are, retail clients would be ignored and institutional orders would be executed when convenient.

In a dealer market all buy and sell orders are filled through a market maker’s inventory.  A market maker is a trader employed by a securities firm to manage the inventory of a particular stock(s).

Market makers will buy stock from anyone placing a sell order and put the stock in their inventory.  Market makers will sell stock from their inventory to anyone placing a buy order.

When a market maker is not filling orders, he or she is free to trade the firm’s account.  When they are trading the firm’s account, they are free to buy and sell as they see fit as long as it does not violate the wishes of the company.  This is how they adjust their inventories.

Remember:  A market maker is an individual working for a firm.  They are hired because of their expertise in both the market and a particular sector or stock.

Unlike an online brokerage, which is just an electronic order routing system, SwiftTrade uses an electronic order execution system.  This system allows trades to bypass any broker and goes immediately to a market maker or ECN to be executed.  Execution and verification are immediate.  This is the primary advantage of Direct Access Electronic Trading.