Quotes Corrupted? You Might Not Even Know It

[Razorback]

Got this info in an email today. I've noticed on some OTCBB stocks that NITE will not show on quote, but on my Etrade Pro Level 2. This may explain why.

There's been a major change in the way microcaps are quoted by the market makers this year, and you might not be getting the right information when you look at a live quote.

There's a revolt by the largest market makers against the NASDAQ and its fees on trading in microcap stocks, and here's what's going on.

The NASDAQ implemented a fee it is now charging Market Makers for $4 per day for every stock they make a market in. Whether they are making a market in Microsoft (NASDAQ: MSFT) or the most obscure, thinly traded BB stock, they pay $4 per day to make a market.

Now, if you a small Broker Dealer, and you make a market in 50 stocks, it's no big deal. $200 per day. However, if you're NITE Securities, and you make a market in 6,000 small stocks, it adds up. That's $24,000 per day, 200 trading days per year. That's $4.8 million per year- I assume the fee is only paid on days the market is open.

Here's NITE and many other's solution. They now make a market in many of the smaller stocks in the Pink Sheets- the lowest level of publicly traded company. The Pink Sheets are open to companies that don't report their financial condition, so I've always recommended staying away from those stocks. They don't pay the daily fee if they trade it in the Pinks.

If you're looking at the quote of a Bulletin Board stock, you might not be getting a real quote. If your quote provider is only showing the Level I quote from the Market Makers on the bulletin board, you might not be seeing the real market.

Here's the solution for now. To double check a current quote, go to Quotes and Investor Information for OTCQX, OTCBB, Bulletin Board, Pink Sheets and other OTC Stocks, and input the symbol. The site will give you a live, snapshot quote of the Level II market for the stock. If you're placing a limit order on a bulletin board stock, you should check there first to see the whole picture pricing wise.

[greencat]

Very interesting post razor...

Originally Posted by Razorback

Got this info in an email today. I've noticed on some OTCBB stocks that NITE will not show on quote, but on my Etrade Pro Level 2. This may explain why.

There's been a major change in the way microcaps are quoted by the market makers this year, and you might not be getting the right information when you look at a live quote.

There's a revolt by the largest market makers against the NASDAQ and its fees on trading in microcap stocks, and here's what's going on.

The NASDAQ implemented a fee it is now charging Market Makers for $4 per day for every stock they make a market in. Whether they are making a market in Microsoft (NASDAQ: MSFT) or the most obscure, thinly traded BB stock, they pay $4 per day to make a market.

Now, if you a small Broker Dealer, and you make a market in 50 stocks, it's no big deal. $200 per day. However, if you're NITE Securities, and you make a market in 6,000 small stocks, it adds up. That's $24,000 per day, 200 trading days per year. That's $4.8 million per year- I assume the fee is only paid on days the market is open.

Here's NITE and many other's solution. They now make a market in many of the smaller stocks in the Pink Sheets- the lowest level of publicly traded company. The Pink Sheets are open to companies that don't report their financial condition, so I've always recommended staying away from those stocks. They don't pay the daily fee if they trade it in the Pinks.

If you're looking at the quote of a Bulletin Board stock, you might not be getting a real quote. If your quote provider is only showing the Level I quote from the Market Makers on the bulletin board, you might not be seeing the real market.

Here's the solution for now. To double check a current quote, go to Quotes and Investor Information for OTCQX, OTCBB, Bulletin Board, Pink Sheets and other OTC Stocks, and input the symbol. The site will give you a live, snapshot quote of the Level II market for the stock. If you're placing a limit order on a bulletin board stock, you should check there first to see the whole picture pricing wise.

[Razorback]

Originally Posted by greencat

Very interesting post razor...

Yeah, I thought it was beneficial info. Trying to be more informative on things I find.. Or things that find me, as with this info..

[namratasnv]

It is the great post as I really don't know about the quotes get corrupted but this will be a great source from where you can come to know every issues and this will be better for those who are investing here for the first time or putting their steps here.