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if it weren't for the well-earned mistrust of specialists which all too often leads large buyers and sellers to withhold order size because they believe the specialist may try to trade against the order to the customer's detriment. |
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If a mechanism existed for instantaneous access to the inside market with instantaneous dissemination of the improved price and size, orders could be placed by "upstairs" (off-floor) market participants anonymously and immediately, thereby providing far superior depth at all price levels. The specialists fear this scenario, as well they should. |
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DAET allows any trading entity to interpose its limit order and size on Nasdaq instantaneously. No longer are prices dependent upon market makers' quotes because any trading entity can enter its own quote and size at any time. |
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Spotting market trends and quickly acting on them is at the heart of DAET profitability. But how does one really know or at least have the highest probability of identifying a "real" trend as opposed to just another market jiggle? This is often the toughest question of all. Who exercises power and who runs away? Your ability to answer these questions will ultimately determine how successful you become in your DAET career. |
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All market makers are not created equal. The DAET trader soon learns to respect powerful market makers and pay attention to their actions. I do not believe there are more than a dozen market-making firms in this category. While many firms are the Ax in a stock from time to time, very few have significant influence on major DAET stocks (stocks often traded by DAET traders) on a continuous basis. Major SOES stocks are usually the better-capitalized, actively traded, higher-priced Nasdaq stocks (Microsoft, Intel, Apple, CISCO, etc.). The "real" market makers usually trade all these stocks and seem to have orders in hand or an inclination to heavily position these shares at all |
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