Decimalization

T

TraderJimR

I just want to get a feel for what guys opinions are about decimalization now that it has been here for almost exactly a year.

For me, I hate it. I think it hurts the public and puts more money in the specialists' pockets. I have definitely had a tougher time since it started, and know other traders who have had the same experience.

There are rumors every now and then that they may take the NYSE back to nickel (0.05) increments, which for me would be wonderful. I think that would bring the institutional traders and daytraders back to the large incomes we once had. For the specialists it would take a lot of their new-found income away, so I think they will fight these proposals tooth-and-nail to keep things as they are. If anyone knows where I can cast a vote for this to happen, let me know.

I really want to know also if there are any NYSE traders that are enjoying decimalization (besides specialists), and what in the world you are doing that makes it good for you.

-Jim
 
AS for the specialists they hate it equally as well. I spoke to one specialists who told me it's slowly killing the industry. Hoping we will see five cent spreads is just a fantasy. Pennies are here to stay.
 
A friend had a small prop firm. His traders were doing ok, making a little. After dec, they gradually all began losing money. His shop is now closed.
 
I couldn't agree more with you!!!!!! As far as the specialist are concerned i would think they love it, also. God knows they have pennied us to death and according to an article from bloomberg they were getting filthy rich when it first rolled out. As far as traders that love/like the penny increments the only one i know that said it didn't matter blew out his account. The argument that pennies help the public is the biggest crock of s--t i've heard in awhile. I guess we have to live with it till there is a better alternative......and when there is we will all flock to it.


http://www.bloombergtradebook.com/corp/tradebook/rs.april2001.pdf
 
I dislike the decimals too. I believe that if the specialists were hurting because of it, they (NYSE) would move to 5 cent increments. The specialists control the orders and everything else on the exchange including Grasso. Grasso would never make a move and take money away from the specialists.
 
Well of course the specialist would never lie, especially if they were making more money than god. I have never had a specialist lie about size on the order book or hold my cancellation for 2 minutes while he waits to see which way the market is going.

Who is responsible for changing this rule in the first place???? Is it the NYSE or the SEC?
 
I think we are "mixed" about the decimals. The strictly momentum traders are still concerned, but the M&A and Pairs traders like them (smaller losses when entering a trade poorly).

We have had to adapt considerably, and we have shown our traders how the bigger winners are changing their methods. One is, of course, enveloping orders (day in and day out, a bit of a task, but well worth it), which we have discussed before here.

Remembering that the limit orders above the selling price, or below the bid, will be given the best price anyway (listed), you can still trade with the same parameters.

My 2 cents...
 
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