Difference Between Poker and the Stock Market

[stephenNUTS]

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The Nasdaq, on the other hand, is strictly an electronic exchange,where most firms have trading desks making bids and offers,on just about any stock they want.No one firm,makes a primary market in any one stock.

This is the TIP of the iceberg ,and if you have further questions...feel free to ask!

Stephen [img]/images/graemlins/cool.gif[/img]

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Thanks for the info, Stephen. Greatly appreciated. Reading this thread made me realize that I need to learn more about the nuts & bolts of the market, as opposed to just trading strategies.

As far as that quoted paragraph, perhaps I'm missing something. The way it's described, it seems as though several firms make markets for the same stock. If that's the case, how is there consistancy in the stock price? One firm could be selling a stock for 40; another, 35 etc..

Thanks again

Brett aka Foghatlive

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The NASDAQ trading market, which you can see see on any Level ll software, lists the bids on the left side,and the asks/offers on the right side,and I will try and answer your question as simply as I can:

The market is established as follows:
The bid(buy side) starts with a HIGH BID,usually at a minimum of 100 shares by a MM,always on the top left corner of the screen,and each subsequent lower bid in descending order by the other participent MM's in that stock.

And the the ask/offer(the sell side) starts off with the LOWEST OFFER on the top right corner of the screen,subsequentally rising higher in price with each particular MM.

ECN's are also listed such as Arca as well,as they provide a TON of liquidity in just about every stock,and a large % of the trading desks/firms use ECN's like Arca to "hide" thier trades as well.The ECN's dominate many of the NASDAQ traded stocks in shear volumn/orders alone

As each BID/ASK is hit or taken out...the next one in line "moves" up.If a MM jumps ahead and lowers his bid to the cheapest price...he is on the top of the list now (making the stock "cheaper")...and obviously the sell side is the same,as the "cheapest" shares will get sold first,and so on and so on.

This process makes for whats called the "inside market",or the HIGHEST BID,and the LOWEST OFFER

If you get a chance...look at a Level ll screen,its real easy to understand,and it really is just a supply/demand type market in its simplest form.

I couldnt find a Level 11 screen to copy and paste to show you an ,example...but do a google search.....or better yet as many on-line brokers have this service available(it will def. cost more $$$) ask them for a free DEMO.

It truly shows each market in real time,and as a trader is a must have!

SF [img]/images/graemlins/cool.gif[/img]

[UrmaBlume]

The markets must take any buy or sell market order in any size and can never fold or limit risk.

The player can bet what he likes, take profit in the middle of the hand and place a stop loss, the market can't.