Class Action Lawsuit against NYSE Specialists

N

NDQnCA

Guest
I am new to trading the NYSE and am just starting to realize that a lot of specialists are crooks and seem to, at times, engage in unfair practices to screw the average trader. I know that sometimes you will get price improvement, but I really hate it when the specialist freezes his book (it always seems to happen when the market is very volatile) and looks at all the order flow- then decides not to fill those orders that would be in the money and fills all kinds of out of the money orders and then spreads his market!! he will spread it usually like 10-40 cents so that you get filled at a shitty price and then he counts on you panicking and getting out at the bid or the offer, so that he can make a quick 10-20 cents off of you. usually i hang on and am wise to this game, but it pisses me off that some guy can decide whether or not to fill my order. then another thing i can't stand is when they back away from their quotes- they will show 20K shares on the offer, you try to NX them for 1000 and you can't get anything- you check the prints and there is nothing even traded at the price where the specialist displayed his big size- that is not honoring a quote!! I recently read an article in Traders magazine about specialists freezing the book- the magazine contacted the NYSE, who declined comment and referred them to the SEC- guess what, the SEC declined comment as well......I was talking yesterday to a trader in my office and we thought that if there was enough interest among daytraders (and we recorded instances where specialists backed away, etc) that we could be a powerful force and could bring a class action suit against certain specialists- this would be the impetus for the exchange to cut down on the bullshit that occurs and ensure a more fair and equitable market. why should the specialist have a license to steal? i understand that he assumes risk and provides liquidity and is priveleged to the most important info on wall street- order flow- but why with all of the advantages they have are they still allowed to pull their shenanigans? so, what do you guys think?? should we band together and go bust some balls??

i wonder how long it is before this thread gets crushed by the powers that be??
 
"why should the specialist have a license to steal? i understand that he assumes risk and provides liquidity"

You asked a question and then you answered it in the next sentence. You also have to consider how much money they have to pay just to be there.

The specialist system is not really better or worse than nasdaq, it is just different.

But, I sympathise. I have been ripped off by the IBM specialist.

I think the problem is that there is no way to fix the system without destroying the system. And if the NYSE were to go away, then we would be all electronic and we would be complaining about how some market maker robbed us.
 
hopefully the marketplace will vote. It (the specialist system) just may be the least evil of all the alternatives.

What right does one have to expect integrity from people who grew up hearing that there are no moral absolutes?

Ah, but this is mixing threads.
 
Originally posted by dotslashfuture
You also left out the price of admission to the club, which is to pay a lot of money for a seat.
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Out of curiosity, are specialist seats sold openly? are there any "membership requirements'' or criteria for buying one?
 
Stocks are assigned to specialists by the exchange, based on performance. Most specialists are employees or partners of Specialist Firms.

Seats are sold at auction like stocks are.
 
Originally posted by NDQnCA
I am new to trading the NYSE and am just starting to realize that a lot of specialists are crooks and seem to, at times, engage in unfair practices to screw the average trader. I know that sometimes you will get price improvement, but I really hate it when the specialist freezes his book (it always seems to happen when the market is very volatile) and looks at all the order flow- then decides not to fill those orders that would be in the money and fills all kinds of out of the money orders and then spreads his market!! he will spread it usually like 10-40 cents so that you get filled at a shitty price and then he counts on you panicking and getting out at the bid or the offer, so that he can make a quick 10-20 cents off of you. usually i hang on and am wise to this game, but it pisses me off that some guy can decide whether or not to fill my order. then another thing i can't stand is when they back away from their quotes- they will show 20K shares on the offer, you try to NX them for 1000 and you can't get anything- you check the prints and there is nothing even traded at the price where the specialist displayed his big size- that is not honoring a quote!! I recently read an article in Traders magazine about specialists freezing the book- the magazine contacted the NYSE, who declined comment and referred them to the SEC- guess what, the SEC declined comment as well......I was talking yesterday to a trader in my office and we thought that if there was enough interest among daytraders (and we recorded instances where specialists backed away, etc) that we could be a powerful force and could bring a class action suit against certain specialists- this would be the impetus for the exchange to cut down on the bullshit that occurs and ensure a more fair and equitable market. why should the specialist have a license to steal? i understand that he assumes risk and provides liquidity and is priveleged to the most important info on wall street- order flow- but why with all of the advantages they have are they still allowed to pull their shenanigans? so, what do you guys think?? should we band together and go bust some balls??

i wonder how long it is before this thread gets crushed by the powers that be??
More...


I have traded exclusively NYSE for many years and agree with you 100%. While I have made a lot of money, I don't think one day goes by without me feeling like I got mugged by the specialists. I've had days where I make loads of cash and leave pissed beyond belief because of some of the shi* the specialists pulled.

I'll tell you what bothers me the most is when you have a bid or offer in there for sometimes 5 or 10 minutes on a stock and they never show it. So many times I have a bid in on a relatively thinner stock that could be as much as 10-cents above the current bid, but the prick never shows me there. At those times I feel that if I were shown, it might entice someone to sell to me or NX me but now they sit on their hands because the bid is so low. One example out of hundreds of specialist-screw-job scenarios encountered daily.

I do not ever want the specialists to go away, because I am horrible at the Nasdaq game, but if we could make them clean up their act I would be able to make probably 50% more than I do now.
 
Originally posted by TraderJimR



I have traded exclusively NYSE for many years and agree with you 100%. While I have made a lot of money, I don't think one day goes by without me feeling like I got mugged by the specialists. I've had days where I make loads of cash and leave pissed beyond belief because of some of the shi* the specialists pulled.

I do not ever want the specialists to go away, because I am horrible at the Nasdaq game, but if we could make them clean up their act I would be able to make probably 50% more than I do now.
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exactly my point- they clean up their act, we all make more :)
 
stop bitching and whining about how unfair the system is. If you want to have his edge, pay $1million for a seat and assume the responsibility of making a market when the world is dumping on you. If cant or wont do that, shut the f up, deal with it and trade. Bitching and whining never made anyone a dime. Learn how to trade and stop thinking about stealing some one elses money with a lawyer.
 
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