Got three bucks? That and a nickel will buy you a coffee drink at Starbucks . Starbucks Corp. said Thursday that it planned to raise prices of its lattes, cappuccinos, drip coffee and other drinks by 5 cents, or an average of 1.9 percent.
Home sales in Southern California continued at their slowest pace in nine years as price levels appeared to be nearing a plateau.
A total of 25,628 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was up 12.8% from 22,712 in July, and down 25.3 percent from 34,292 for August a year ago, according to DataQuick Information Systems.
| All Homes; | No Sold Aug-05 |
No Sold Aug-06 |
Pct. Chg |
Median Aug-05 |
Median Aug-06 |
Pct. Chg |
| Los Angeles | 11,653 | 9,193 | -21.1% | $494K | $517K | 4.7% |
| Orange County | 4,708 | 3,203 | -32.0% | $617K | $633K | 2.6% |
| San Diego | 5,379 | 3,666 | -31.8% | $493K | $482K | -2.2% |
| Riverside | 6,452 | 4,879 | -24.4% | $388K | $415K | 7.0% |
| San Bernardino | 4,522 | 3,611 | -20.1% | $344K | $365K | 6.1% |
| Ventura | 1,578 | 1,076 | -31.8% | $592K | $598K | 1.0% |
| So. California | 34,292 | 25,628 | -25.3% | $476K | $489K | 2.7% |
Day traders typically look to two sources of financial gain. They are same day "swing trading" and "playing the spread". Swing trading (or position trading) is where the trader holds the stock for a short time (usually more than a day) hoping their value will increase. An alternative is to short the stock, which is a way to profit on the stock decreasing in price, but which requires paying interest if one keeps the position open for a length of time.
Playing the spread involves buying at the Bid price and selling at the Ask price. The numerical difference between these two prices is known as the spread. The bigger the spread, the more inefficient the market for that particular stock, and the more potential for profit. This spread is the mechanism that large Wall Street firms use to make most of their money (as opposed to trade commissions) since the advent of online discount brokerages. To make the spread means to simply buy at the Bid price and sell at the Ask price. This procedure allows for profit even when the bid and ask don't move at all. This strategy has become less profitable (and popular) since stocks began trading in penny increments.
When the typical online investor places a market order to buy a stock, his broker submits this order to a market maker (MM), who then fulfills the order at the Ask price. In other words, the Ask price is the price the MM is asking for the stock. When the typical online investor places a market order to sell a stock, the broker submits the order to a MM and sells at the Bid price, i.e. what the MM is bidding for the stock.
Due to the liquidity of the modern market, orders are constantly flowing. Many times, a MM will buy a stock just to turn around and sell it to a particular broker. In fact, one of the primary purposes of the MM is to maintain liquidity in the market (among other things). Through this transaction, the MM will profit anywhere from a few cents to a whole dollar per share, in average circumstances. Over the course of a single day, a MM may fill orders for hundreds of thousands or millions of shares.
Day traders are able to capture some of the spread through buying access to Direct-Access Broker systems, rather than by trading through retail brokers. The average online investor uses a retail broker. (All of the brokerages that advertise $15, $10, or $5 commissions to the general public are retail brokers.) Through direct-access brokerage systems, day traders send their orders directly to the ECNs, instead of indirectly through brokers. ECNs put day traders on the same level as MMs.
via [ TradeBlog ]
Electronic Communication Network. ECNs bring buyers and sellers together for electronic execution of trades. The SEC has defined an ECN as any electronic system that widely disseminates to third parties orders entered into it by an exchange market maker or over-the-counter ("OTC") market maker, and permits such orders to be executed in whole or in part.
The definition specifically excludes internal broker-dealer order-routing systems and crossing systems – i.e., systems that cross multiple orders at a single price set by the ECN and that do not allow orders to be crossed or executed against directly by participants outside of the specified times. There currently are nine ECNs operating in US securities markets: Instinet, Island, Bloomberg Tradebook, Archipelago, REDIBook, Strike, Attain, NexTrade, Market XT, and GFI Securities. [EDIT: Please note that this statement is outdated; much consolidation has occurred of late. For example, Instinet and Island merged to form Inet, which was recently acquired by NASDAQ. And Archipelago recently merged with NYSE.]
ECNs have a wide variety of subscribers, including retail investors, institutional investors, market makers, and other broker-dealers. ECNs provide many market services to these subscribers. For example, ECN subscribers can enter limit orders into the ECN, usually via a custom computer terminal or a direct dial-up. The ECN will post those orders on the system for other subscribers to view. The ECN will then match contra-side orders for execution. In most cases, the buyer and seller remain anonymous to each other, with the trade execution reports listing the ECN as the contra-side party. In addition, subscribers may use such features as negotiation or reserve size, and may have access to the entire ECN book (as opposed to the "top of the book") that contains important real-time market data regarding depth of trading interest.