ers of choice to execute the order at the goingprice. If it is a limit order, then it is no worse than 50.01. If the MarketMakers cannot execute the limit order, they hold the order until that pricebecomes available.The process of manually entering the information into the data fieldson the order page, sending the order, confirming the order, having theorder sent to the Market Maker, having the Market Maker take the otherside of the order, and then having a delayed confirmation is not the idealsituation for the active trader. The process can and has taken up to 20minutes during the open of the trading day. I remember trading a stockcalled MZON with E*TRADE. I entered in my order to buy the stock ata certain price. I was asked to confirm the stock order and I did. The orderwas sent to the market and I waited. I watched the stock move up 4points, then down 10 points, and back up 4 points before I knew I hadconfirmation of the buy order and at what price. I had gone from up$1,200 to down $2,000 and ended up taking a loss of nearly $400 beforethe trade was over. This time delay is simply too long for the activemomentum trader.This inefficiency may be suitable for the investor who buys and sellsa few times a month but is much too long for the active momentum traderwhose trades sometimes only last a few minutes. This void in efficiencycreated a need for an even quicker, more reliable execution service,which was filled by Electronic Direct Access Trading Firms (EDATs).
ELECTRONIC DIRECT ACCESS TRADINGFIRMS (EDATs)EDAT firms are companies that cater to the active trader. In comparisonto Web-based and traditional brokerages, EDATs are much more efficientin the way orders are placed and confirmations are given. I feel it is irresponsible for online brokerages to offer active trader tools while stillbeing inefficient in order placing and confirmation times. Several EDATsare available to active traders. A few examples of EDATs can be foundat MBTrading.com, Castleonline.com, and CyBerCorp.com. I personallyuse MB Trading for both my data feed and execution services. I simply
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find them the best overall in speed as well as technical and customer support. Interestingly enough, Charles Schwab & Co. recently acquiredCyBerCorp.com. This tells us that the acknowledgment of the need forsuch efficiency was clear. So let’s see how EDATs work and why they aremore beneficial to the active trader.EDATs provide a direct link to the markets by using several execution routes. These routes enable traders to place orders against liabilityfrom Market Makers or Electronic Communications Networks (ECNs) inindividual Nasdaq stocks. Placing a Small Order Execution Service (SOES),SelectNet, or ECN order provides this direct access to the Nasdaq market. These services also enable us to place orders for listed issues throughthe SuperDot system.As we discussed earlier, listed issues are handled by one specialistwho is responsible for keeping an orderly market for the stocks he or sheprovides liquidity for. The SuperDot is a system by which we can enterorders directly to the specialists. The specialist will then match the orderson the order book and execute the trade, fill the order from his or herown inventory, or place the order in the order book until he or she canmatch the order. If the order is filled, the confirmation report is then sentback to the individual stating how many shares were filled and at whatprice the trade was executed. If the order is placed to the order book, thenthe individual must wait for a confirmation of execution. No messagesstating “your order is still pending” will be sent back to you.The SuperDot system can distribute an order up to 99,999 shares foran individual listed stock. This system, because it is much more efficientin the way orders are handled and can reduce the cost of doing business,translates to lower commissions for the active trader. Lower commissionsare necessary for active traders to reduce the cost per order. Manytraders tend to trade for small profits and if commissions are too large,the majority of the profit is eaten by commissions. Those who are investing for the long haul or are paying brokers/managers to manage theirmoney are paying higher commissions, which are sometimes a necessaryevil for the peace of mind that they can’t trade their money themselves.Therefore, lower commissions aren’t as necessary for those who can’twatch their portfolio and make rapid-fire decisions on a daily basis. Forthe active trader who does a few trades a day, lower commissions are necessary to keep more of the profit in the account. Orders that are placedin this fashion are generally executed within seconds during normal trading operations. The confirmation times usually are just as fast.Times of abnormal activity, such as when a listed stock is added toa new tracking index, may take a few minutes due to the increased order
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flow and matching of orders on the order book. Because many smallerexchanges are competing for shares in the same issue, many of these arewilling to execute orders at the inside price (best price). This providesthe necessary liquidity that is desired by active traders. It gives a representation of an automatic execution system that is beneficial for traderswho want to trade quickly at the inside price or better.The main advantage that a direct access firm can offer to the activetrader is a direct link to these market participants by SOES, SelectNet, orECN access. This prevents these firms from selling order flow as well astrading against your position. You are not sending your order to a brokerage that in turn sends your order to the markets. You are skipping themiddle step by executing your orders directly with the market participants. The disadvantage to having the ability to participate more efficiently is that you must learn to route your own orders to these marketparticipants. Most Web-based and traditional brokerages take care of theorder routing for you. With direct access trading, you must learn how toroute your orders and know which routes work best in which situations.This becomes the biggest obstacle to traders as they move from theirlearning phase to their live trading phase. Many individuals fear thatonce they are in a trade, they will not have the execution ability to exitthe trade. This occurs more often when a stock is moving fast againstthem and they do not know how to get out with minimal loss. It isnot as easy as pressing the Sell button with a Web-based brokerage. Withdirect access, traders need to know who the market participants are,how much liability they are showing, and what the best route is in thatparticular situation. We will discuss each route with its advantages andlimitations.
ORDER ROUTING METHODSAt the time this book is being written, new rules are being proposed thatwill alter the functionality of the SOES and SelectNet systems. This newparadigm is being referred to as SuperSOES and I will be discussing thisintermittently as it pertains to active traders. We will not go in-depth onthe subject as much uncertainty surrounds its final guidelines.
SMALL ORDER EXECUTION SYSTEM (SOES)The first route to discuss is SOES. SOES stands for Small Order ExecutionSystem. Many have heard about SOES because it was instituted after thecrash of 1987. At the time of the 1987 sell-off, brokers were unavailable
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by phone due to the shear volume of trades. Brokers were not takingorders from individual investors and many felt helpless that they couldnot freely participate in the liquidation of their shares. SOES was tochange this by providing traders with access to Market Makers’ liabilitysizes. This allowed them a greater ability to enter and exit stocks without having to wait for their broker to answer the phone.With the institution of SOES, the playing field was leveled betweenthe institutions and the individual traders. Equal access to the marketswas now possible. As SOES evolved, it has provided the trader with agreater access to market participation, but it also has some limitationsthat you must be made aware of.First, to use the SOES route, a stock has to be SOES-eligible. A fewstocks on the Nasdaq SmallCap Market are not SOES-eligible. EDATshave key components in their execution software packages that enablea trader to know if the stock is SOES-eligible or not. The next aspect ofSOES is tier size. Tier sizes refer to how many shares are able to be SOESeligible in a particular order. The three tier sizes currently are 200, 500,and 1,000. This means that if a stock has a tier size of 200, then a tradercannot enter a SOES order for more than 200 shares. If the tier size is1,000, then a trader can enter an amount up to 1,000 shares.SOES provides instant executions against Market Maker participants at specific price levels. This is the advantage for the active traderwhen wanting to execute an order in a fast and efficient manner. Theorder can be a market or limit order. This means that a market order willbe executed at the best available price when that order has its turn in theSOES queue. A limit order simply states that the order must be executedat a specific price or better. If this limit price is not attainable, then theorder will not be executed and the order will be sent back to the individual placing the order. SOES orders are prioritized by time. Therefore,a limit order or market order does not have a preference other than thetime the order was placed. It is first come, first served in the SOES queue.A disadvantage to SOES is that ECNs are not executable againstusing SOES. They are not SOES-eligible market participants. Therefore,if two ECNs are at the best price and you enter a SOES order for the insideprice, the order will be rejected. In relation to the tier size of a SOESablestock, when the Market Maker fulfills his or her liability to the sizequoted, the Market Maker has 17 seconds in which he or she is not obligated to fill anymore SOES orders. Those orders remain in the queue untilthe Market Maker fills the order, refreshes his or her quote, or moves offthe best price. Any unfilled orders are then sent back to the individualplacing the order as non-executed.
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Two proposals to SuperSOES that are interesting in this matter arethe decrease of the time constraint and the maximum size changes also.The Market Maker will now have only five seconds to decide his or hernext action. Second, the maximum size will move from 1,000 up to 9,900shares for auto-execution. If Market Makers didn’t have to show morethan 100 shares, this would not be such a big deal. However, the newrules will state that any quote showing 1,000 or more shares must provide access to the reserve amount that the Market Maker is willing totrade. If a Market Maker has reserve, then he or she must display at least1,000 shares on the quote as well. Anything below that share size willmove the Market Maker off the inside price once the liability is executedagainst. The implications of this are still unknown because we are notable to trade with this system until at least mid-summer 2000, if not later.SOES is a system that registered market representatives and NASDbroker-dealers are unable to utilize. When one wants to short a stockusing SOES, one must abide by the tick rules for shorting. This states thata stock must be on an up-tick Bid for the SOES system order to meetrequirements. This rule was mainly instituted for market stability becauseno one wants to see stocks being sold off or shorted, providing addedselling pressure to a stock that was already falling on fast pace. WhenMarket Maker participation is active at price levels, SOES is a great tool.When the participation is limited, using SOES can cost traders more profitif they are unable to recognize the scenarios that limit the effectivenessof SOES.Two points to discuss regarding SOES market orders have to dowith Initial Public Offerings (IPOs) and stocks that are moving fast in eitherdirection. Initial Public Offerings tend to be very volatile on the first day.The pace of the stock and market participation is very fast and usuallyhard to read as the float tends to be limited and Market Makers haveplenty of client orders to fill. When placing a SOES market order for sucha stock, it will more than likely be executed at a price that is very far fromwhere you wanted to buy it. If the stock is falling, this may please you.If the stock is rising, you may be paying anywhere from $1 to $5 moreper share depending on the IPO. This is a highly risky and inefficientmanner by which to trade IPOs.When a stock has little Market Maker participation and the stock ismoving fast, using a market buy order is highly risky and inefficient asyour price may be much higher than what you wanted. However, on thesell side, a market SOES order is telling the market that you just wantout, no matter where the price is. This should be a last resort scenario.With a fast-selling stock, no magic exit button is available. A trader could
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easily face an extra $1-per-share SOES execution if the stock is fast andhas limited Market Maker participation at each level. When learning executions, be sure to understand its functionality and decide on which scenarios SOES works best. If plenty of Market Makers are at tightprice-level spreads, then SOES is reasonable. If Market Maker participation at each price level is small and the pace of the stock is fast, then usingSOES will generally provide an execution that will be worse than whatyou originally wanted.
SELECTNET (SNET)Another route that EDATs provide for is SelectNet. SelectNet is a negotiation system that is used by Market Makers to fill orders via the Nasdaqmarketplace. Instead of using a phone order, Market Makers simply enterin a SelectNet order to another Market Maker in a faster and more efficient manner. When using the phone, traders have to go through thesteps of using a phone. They pick up their phone, dial, and wait for ananswer. With SelectNet, the order is sent immediately. Many MarketMakers prefer this efficiency and ease of use. SelectNet works in a manner so that a market participant will receive a message that another market participant wants to buy or sell a set amount of stock at a certain price.Currently, the limitation for SelectNet is an order no greater than 99,999shares. This price can be at any level. It does not have to be at the insideprices. To facilitate this action, most EDATs offer two choices forSelectNet.The first is a SelectNet Broadcast order. You may see the abbreviation that reads SNET BROD. SelectNet orders that are sent by broadcastare sent as an order that can be seen by all Market Maker participants ontheir workstations. Because the order is a broadcast order and notdirected to anyone specific, no legal obligatory action must be taken byany Market Maker. The Market Maker can elect to fill your order or leaveit alone. Therefore, you may or may not receive a fill and get a responseback regarding your order. I have found that in cases where stocks aretrading at a relatively fast pace, SNET BROD orders tend to be overlooked for executions. This makes sense for the most part for a stock thatis generally moving fast in one direction. Market Makers are not willingto accept non-liability orders for a stock that they may be able to executeat a better price once the action in the stock slows to a more reasonablelevel of activity. This isn’t always the case but provides a reasonableexample for why SNET BROD orders are not to be used if you want afast execution in a fast stock.
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The other type of order is a SelectNet Preference order. You may seethis abbreviated as SNET PREF. These orders are directed to specific market participants at certain price levels. Instead of all Market Makers beingable to see this order, the only person who can see this order is the market participant that you preference. Many EDATs simply enable tradersto click on their Level 2 screen (which will be explained later) and theSNET PREF order is automatically entered into the execution software.This is a benefit for traders who want that extra second in executionahead of the rest of the traders. Every second counts.When a Market Maker receive a preference order, he is now legallyobligated to respond to your order. He has three options: he can acceptthe order and execute it, he can decline it, in which case your order willbe sent back to you, or he can fill a part of the whole order. This is referredto as a partial fill in trading lingo. A trader can also use SelectNet to matchorders against ECNs. To do this, he simply enters in a SNET PREF orderto an ECN for any size up to the amount shown by that ECN and it ismatched and auto-executed assuming no liability trades were ahead ofhim. For example, if I wanted to buy 1,000 shares from Instinet (INCA),I would enter in a SNET PREF order to INCA for 1,000 shares and, assuming no orders were ahead of me, I would receive my fill almost instantly.Some Level 2 software and execution packages offer you the abilityto just click the INCA line at the Ask and it is automatically placed inthe execution for you; all you need to do is send the order. Again, everysecond counts.SelectNet orders are received and executed by time priority as well.This means that if you want to buy 500 shares of a stock at 10 and theMarket Maker is showing that he or she is willing to buy 500 shares, yourorder will be executed, assuming no order for 500 shares came beforeyou. If there were orders for 100, 200, and 100 and then you entered yoursinto the queue, the Market Maker would be obligated to fill 100, 200, and100, and only 100 shares of your 500-share order. This is a partial fill. TheMarket Maker then has the right to fill the rest of your order, change thesize, or move off the Ask. The problem arises when the Market Makerhas SOES and SelectNet orders coming at him or her.The following is a recent example of a stock that I missed executing because of choosing the different route. A news alert was given on astock. I entered in my SOES order at the inside Ask as the Market Makerwas showing me enough size and I didn’t see any volume ahead of me.As I was entering in my order, I saw trades (prints) occur at the insideAsk, but I was not being filled. I still had my SOES order live and stillsaw prints at the inside Ask. The Market Maker then lifted his Ask price
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and my order went unfilled. What happened was that he filled his liability obligation and I was back in the SOES queue. He then filled hisSelectNet orders manually and lifted off the Ask. I remember beating atrader in the Mtrader chat room to the execution time, but he chose toSelectNet Preference the Market Maker and was filled first. I had a SOESorder and was not filled. This is just one example of when different routeswill give you different results.The disadvantage to SelectNet occurs when a stock is moving fast.Just like SOES, your chances for an execution are much more unlikelywhen a stock is moving fast. When traders send a SelectNet order to themarket, it must remain live for 10 seconds before they can cancel it manually. On the other side of the trade, once the Market Maker fills his orher liability, he or she has 30 seconds to respond to pending orders. If astock is moving fast and you are hanging around for 30 seconds for a confirmation, this can feel much longer than 30 seconds. Also, if those 30 seconds pass and you are not filled, this can cause a bit of frustration,especially if you are trying to exit a stock.Finally, one point to consider is that a trader can enter in an all-ornone (AON) or ANY order. Suppose that I wanted to enter a stock at thebest ask for 1,000 shares. If I placed an AON order at the Ask, then aMarket Maker would not be allowed to execute that order unless he orshe was willing to fill the whole amount. If I entered in an order as ANY,then a Market Maker could fill any lot up to 1,000 shares that he or shewanted to. The Market Maker has the ability to fill none, some, or all ofthat order, assuming his or her liability has already been exhausted.SelectNet can be a useful route when used in the right situations.
ELECTRONIC COMMUNICATIONS NETWORKS (ECNs)The use of ECNs enables market participants to post orders anonymously. INCA is famous for institutional firms executing their ordersthrough this ECN. They offer the ability for institutions to mask theirintentions by placing liability size on the order book through INCA.Traders never know if it is Goldman Sachs (GSCO), Fleet Securities(FLTT), or one or more of the other Market Maker firms that constitutesize in the INCA quote. This provides an advantage to those firms thatdo not want to be giving away possible intentions while taking advantage of the liquidity in the order book. With ECNs, traders are affordedthe ability to bid for stock and offer stock out at the Ask. This is a greatadvantage to those traders who want to buy into selling and exit intostrength. When we discuss a few methods later in the book, we will showwhy this is beneficial.
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The first rule about an ECN that must be known is that ECNs arenot SOES-eligible. Therefore, if an ECN is at the best Ask and I want tobuy stock at that price, I would have to use a route that utilizes SelectNetor a matching ECN order if I have access to that ECN route. For example, if I want to buy 1,000 shares of DELL at 50 and the only market participant is ISLD at 50, then I would have to place an ISLD order for 1,000shares at 50 or use a SelectNet Preference order to ISLD for that amount.Assuming I was first in the order, I would be auto-executed at that pricefor that order. I would not be able to enter a SOES order at 50 for 1,000shares because ISLD ECN is not SOES-eligible. With the new SuperSOESrules due out in late 2000, ECNs may participate for SOES eligibility, butcurrently, they are not.With ECNs, I have to accept partial fills as a part of the game. Iremember getting a fill for one share of a stock on ISLD before. Althoughsomeone may ask why someone may trade one share of stock, the explanation is relatively easy. Some traders, when they are figuring out howmuch stock to buy, will divide the price of the stock by how much moneyis in their portfolio. Therefore, if a stock is trading at 9.99 and I have$100,000, I would be able to buy 10,010 shares of stock. When this person goes to sell this stock, he or she may get a fill for 10 orders of 1,000shares and one order for 10 shares.
INSTINET (INCA)The two most frequently used ECNs are Instinet (INCA) and Island(ISLD). Instinet was implemented in 1969 for the purpose of allowinginstitutions to display bid and offers in listed and Nasdaq stocks for otherinstitutions to execute against. As Instinet’s popularity grew, brokeragefirms were allowed access. Individuals have recently been granted accessto the INCA order book and routing capabilities through brokers likeMBTrading.com. The major advantage to the trader is increased liquidity to route orders as well as having an order represented via anotherroute. The disadvantage to the trader is that traders are trading againstpositions that are being shown via INCA, and they don’t know if theyare retail orders or a Market Maker masking intentions with greaterreserve than what is being shown.Although some EDATs provide access to Instinet, they are notdirectly executing against the order book, but rather sending the orderto an Instinet representative who places the order to the order book foryou. Not having utilized this method personally, I am unaware of howefficient this process is. I simply SelectNet Pref an order to INCA if theyare at the price I desire, but I have never placed an order to the INCA
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order book. Instinet trades 24 hours a day and many wonder when therest of the market will follow suit. When trading against an INCA order,many brokerages charge an extra fee for doing so. Currently, this cost is.015 cents per share.
ISLAND (ISLD)Island (ISLD) was introduced in 1996 and has exploded since that time.The system is affordable and extremely liquid. The access to the orderbook is also an advantage to traders as they can see how much participation is at each price level on ISLD. The book can be seen for free atwww.isld.com. With ISLD, traders have been given the ability to makea market in this stock. They can buy at the Bid and sell at the Ask if theyso choose. They can also split the spread with an order if the spread iswide. We will discuss how to in a bit.For an ISLD order to be entered, traders must designate this routeas their choice in their execution system. However, you should reviewsome important points regarding its functionality. First, you cannot useISLD to match an order against another ECN or Market Maker. ISLDorders are only matched against other ISLD orders. Luckily, we don’thave to worry about locking or crossing the market anymore as the ruleshave changed already. Before, when an ISLD order was entered to buythe stock at a price that was equal to the best Ask, the Bid order wouldbe locking the market and would be rejected. The order must be at least.03 below the best Ask for it to not lock the market. If one were to bid forthe stock at a price above the best Ask and no ISLD matching order waspresent to execute against, then the stock order would be deleted as crossing the market. Locking a market and crossing a market violated FairMarket rules set forth by the NASD. As of now, this no longer is true.One more important point to note about ISLD is that it is by limit orderonly. Market orders are not available with ISLD.
ARCHIPELAGO (ARCA)The last route that I’d like to discuss is ARCA. ARCA is both a routingoption and ECN. ARCA is the abbreviated version for Archipelago.ARCA, as an ECN, functions much like ISLD in that one is able to postorders to the order book and then to the Level 2 if the order is notmatched against. ARCA’s order book is now available to the public. Ifyou have ARCA, your Level 2 will show several separate orders labeledARCHIP. In chat rooms and bulletin boards, they are referred to as chippies. You will see a comment like “chippies are lining up to buy thisstock.”
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If you do not have this access, then you are only seeing the aggregate amount of shares available on the Level 2 screen next to the ARCAsymbol. Those without ARCA access will need to SelectNet Preferencean order to the ARCA ECN to match an order, much like we do with ISLDand INCA, as described previously.For those with ARCA routing capabilities, the route acts as a smartroute. This means that the route uses an algorithmic system to execute asfast as it can at the inside prices. The way ARCA works is by first tryingto match the order against the liquidity in the order book. If not enoughliquidity is present, ARCA looks for available ECNs at the inside priceto match. ARCA does this with SelectNet. If enough size is available fromECN participation, the order is auto-executed at that price. The problemlies within the situation when the ECNs are not present with enough size.The ARCA program then looks to the Market Makers at the inside pricesand identifies the most active participant. After the system identifies thisparticipant, it preferences this Market Maker. ARCA will continue towork the order until the market moves away from any remaining sharesor until the next Market Maker at that price level fills the order.Because ARCA continues to work this order, the ability for marketorders as well as limit orders is presented. If the price moves outside thelimit of your order, then you are posted to the Nasdaq Level 2 again forany remaining shares. The major disadvantage with ARCA is when thestock is moving against you and ECN participation is limited or nonexistent. Remember that ARCA utilizes SelectNet, and Market Makers,after filling liability requirements, have 30 seconds to decide on remaining orders. While the stock is moving against you and you are waitingfor that response, your frustration level grows. Eventually, you are eitherdeclined or you cancel and try again. Meanwhile, the stock continues tofall and you are continuing to chase the stock lower. ARCA developersare aware of the liability requirements so that if a Market Maker does notrespond in 30 seconds, they move to the next Market Maker. However,by this time, who knows where the stock will be? One final point is thatARCA will not accept odd lots. ISLD allows for orders of one share.ARCA must be in rounded multiples of 100.These four routes (SOES, ISLD, SNET, and ARCA) are generally themost used routes by EDATs. Some offer added features such as othersmart routes or other ECN access, but generally an EDAT service willprovide a trader with SOES, ISLD, SNET, and, more often than not,ARCA. When choosing an EDAT system, be sure to find out aboutwhich routes they are offering for access and what fees are involved inutilizing each system according to price-per-share fees on ECNs and possible multiple partial-fill transactions.
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There is a lot to absorb when it comes to order routing, but this iswhat separates the professionals from the amateurs. If you fully understand the routes available, you are more apt to use the right tool for theright job and get quick and better fills for your orders. It is well worththe time to learn each routing system fully.
ADVANCED TOOLS OF AN ACTIVE TRADERNow that you have a basic understanding of order routes and the functionality of why EDAT systems are functionally better than Web-basedsystems, let’s discuss a few more necessities of the active trader that areoffered through most of these brokers. Many EDATs will offer a datapackage that comes complete with a Level 1 screen, a Level 2 screen, aTime of Sales Ticker, Charting, and News services. The fee for the varying degrees of information that one needs is up to the individual toassess. However, I suggest that one starts small and upgrade services asneeded.There is no reason to tie up capital in software enhancements thatyou may not use. At the very least, a trader should have access to a Level1 and Level 2 screen. The Time of Sales Ticker is also important for seeing the prices at which trades occur. Charting is a must for technical typeanalysis, and news services are a plus because they tend to be the catalyst for momentum.
LEVEL 1The Level 1 screen is the screen that displays the current real-time market data that you mostly see on media and Web site tickers. You can setup your Level 1 screen in many different ways (see Figure 3-1).The most common setup for traders utilizes the following columnsfrom left to right. They are Symbol, Net Change from Previous Day’sClosing Price, Percentage Change from Previous Day’s Close Price, Bid,Ask, Day High, Day Low, Volume, Last Price, Last Price Volume, OpenPrice, and Close Price. This information gives a face value look at themarket activity for a particular stock. Any stock with a ticker symbol canbe placed into a Level 1 screen to derive the information. Let’s discusssome of the columns to gain a better understanding of exactly what weare looking for with a Level 1 screen.First off is the stock’s ticker symbol. Each publicly traded companychooses a stock symbol to represent their company. As we discussed
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Level 1
F I G U R E
3 - 1
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earlier, stocks with one, two, or three letters are listed stocks. Stocks withfour or five letters are Nasdaq-related issues. We place the ticker symbolin the Level 1 screen to derive the information that we need to arrive atan assessment for where the stock is trading. The Net Change from thePrevious Day’s Closing Price represents how strong or weak that stockis on that particular day. If the stock is showing a negative number inthis column, then the stock is trading lower on the day. The same appliesconversely if the column shows a positive number.The Percentage Change from the Previous Day’s Closing Price calculates the percentage that the stock is up or down relative to yesterday’sclosing price. We want to see this to gauge possible predictability astraders react to 5-, 10-, or 20-percent price movements, depending on theprice of the stock. The Bid column represents the price that we traditionally sell at. Market Makers and ECNs are found at these levels. Theystand ready to provide liquidity and buy the shares that you are willingto sell at the Bid price. We learned previously that