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In a message dated 98-08-29 22:21:37 EDT, RonAug@xxxxxxxx writes:
> This is what I found also -- using my normal technical analysis techniques
> in TS, I was much better able to find viable trades, but in this scenario I
> could send my orders in via pony express and didn't need L2.
>
> So now I'm really confused! What's the point in having a $3000/month L2
> setup (cheaper now, I hear) if there's no advantage???
There are various and sundry reasons it's handy to know the info L2 can
provide (BTW, my provider charges $100 a month extra for it). I'll give you an
example of something that happened Friday. I was watching a stock drop
steadily towards 5, where MLCO appeared as the sole bidder at 5 3/16 for 1000.
After watching maybe a dozen trades go by at 5 3/16 for 1000 each and MLCO
remaining on the bid, you could conclude that MLCO wanted to support the stock
at 3/16. They could've been trades going off "behind the scenes" but generally
those are of higher volume and less frequent than Selectnet/SOES trades.
Knowing that MLCO has a substantial position in this stock in it's mutual
funds (> a million shares last time I looked) helps also. Where I might've
been inclined to short it given it's downward action without L2, I stayed out,
and within a couple minutes a couple more MM's joined the bid at 3/16, and it
moved to 1/4 a couple minutes after that.
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