Replies to post #745 on Stevva Corp. (STVA)

[andrius]

why would it say they don't share data instead of there are no market makers? Where is your source for what you claiming?

I have traded greys for a long time and usually do really well with them because I have a knack for getting my orders filled. I know for certain they do not stay with your broker because they end up in different destinations.

[andrius]

So do you have a source or reference to show us how brokers make market in grey sheet stocks?

Broker is just a middle man. They take your money which gets placed with clearing firm which does all the book keeping. Making sure your account is complaint with rules. When you buy something they are the ones that work with other clearing firms to exchange cash/shares. Orders that are placed with broker get sent to market place where MMs, specialists and ECNs execute your order.

Most brokers don't really do much other than customer service. Clearing firm handles your cash/shares when its exchanged/requested. Platforms where you see quotes, your orders get routed, etc are usually provided by 3rd party software firms. Orders get executed my MMs/ECNs.

Obviously there are some exceptions big brokers like Etrade have their own clearing firm. Have their own software etc. But they are all separate parts of the company. Etrade definitely does not make a market in stocks though. In fact they sell their order flow to select parties that mostly fill your orders in dark pools that aren't even publicly quoted(thats for big baords).

[andrius]

Put it this way. You could be broker simply by filing the correct forms and have enough capitalization. Call Apex clearing and sign up with them for a fee. Go to DAS and sign up your firm to get access to their trading platform for your clients.

Boom you done. Now all you got to do is find clients and do customer support. Which isn't always easy when you got guys thinking its your fault because their order isn't going out in market that is non-existant. Or its your fault that third party software providers server is lagging that day. Or that you stole their money when MM fills their market order for too much slippage etc...