Date:    4/13/98 4:52 PM
     
     
To:             SEC, Mr. Jonathan Katz      
Subject:        Actual Size Rule Comment Letter
     
Dear Mr. Katz,
     
Re: File No. SR-NASD-98-21
     
Thank you for asking for public comment on the absolutely one sided 
proposal allowing Market Makers to quote a minimum of 100 shares on any 
stock.  I have been an active day trader/investor since September of 
1994.
  
Over the last year the Market Makers have been able to abdicate making a 
market for the 150 stocks currently in the program.  The inside spreads 
may have stayed the same statistically (if you believe NASD biased 
studies), but the effective spread has more than tripled.  For instance, 
the bids on a particular stock used to be quoted in 1000 shares at 
least.  That meant that if a MM left the inside bid, I could get out at 
the next level for at least 1000 shares.  Now, most of the time the MM's 
will be quoted in 100 shares or 200 shares, especially when there is 
stress on the market.  What this means is that it will take me up to 10 
different levels to get filled on a market sell.  The liquidity and 
depth of the market has declined by a factor of 3 to 4 in my actual 
experience.  My daily average executions total at least 400,000 shares. 
A common practice employed by the MM's is for one MM to reduce his size 
to 100 shares and stay on the bid or offer while all other MMs leave the 
second and third levels.  This effectively eliminates liquidity.  This 
practice occurs thousands of times daily and affects almost all of my 
trades at some level.  Is this fair?  Does the public benefit? 
Rather than passing on the risks from the MM's to the public again (e.g. 
The billion dollar judgment against the MM's) the NASD should rescind 
the minimum size rule for the 150 current stocks.  In addition, the NASD 
should reinstate the maximum spread rule.  The spreads are horrendous.  
What are the goals of the SEC and the NASD?  Are the goals to enhance 
the transparency, liquidity, and efficiency of the market or are they to 
allow the MM's to continue to hide orders and continue to back away from 
any semblance of legitimate size.

Thank you for your time and interest.
     
Sincerely,
     
     
Andy Kershner
806 Newman Dr.
Austin, TX 78703
512-476-7629
kersh@mindspring.com