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terns through the Nasdaq, at: www.nasdaqtrader.com/static/tdhome.stm |
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For example, you can research a particular stock to learn which market makers and ECNs are the largest traders in that stock. There are two reasons you want to know who the larger players are in a particular stock: |
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1. They will be your best source of liquidity. |
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2. They will be the most aggressive on price. |
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You also may research a particular market maker or ECN to learn which stocks they are most active in. This is just another way to discover where the best liquidity and price will be. |
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Figure 10.4 shows the Nasdaq Web site, showing the ten biggest traders in CSCO. Can you see how important that information can be for you? Doesn't this information encourage you to look to ISLD, MASH, SBSH, and GSCO when you want liquidity in CSCO? |
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There are two ways to describe your position in a stock: |
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1. You can be longwhich means you own the shares. To close out a long position, you sell your shares. |
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2. You can be shortwhich means you have agreed to sell shares you did not own so you have a negative position in the stock. To close out a short position you buy shares. |
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Are you a short seller? Have you ever made a short sale? If your answer is no, |
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we would tell you that you are not yet even "in the game." |
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we would tell you that you are leaving about 50 percent of your profit opportunities "on the table." |
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we would tell you that you are fighting a battle against a very strong adversary, but you have "one arm tied behind your back." |
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we would tell you some more things, but we have run out of cliches. |
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Let's start with the basic concept of short sellingit is selling something that you do not own. Sure, we know that sounds like something |
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