Effects of NYSE Direct+ (aka NX)

C

cashonly

Bright Trading, LLC
Now that the NYSE has had their own ECN kinda thing - Direct+ (aka NX) going for a while, I was wondering how people have found it and how it affects their trading.

For example, I know that with the specialist system, if the specialist is short and doesn't want to be, he can put in a big offer on the ask and "scare" some stock in. He'll sit on the bid and cover his short position, then take of his "offer" and the stock will jump up. This is not heresay either as I have witnessed this on the NYSE floor.

So, with NX, it seems like things have changed. For example, I often see 1x1 sizes meaning that the specialist doesn't want NX orders can be executed. So if that's the case, maybe the specialist is doing things different now that NX is here, does he pull the same kind of tricks as he'd be instantly executed and couldn't do any tap dancing? Or maybe now he does that when he actually does want to sell (in the case of my example).

What have other people here experienced with NX?
 
Someday they'll get rid of the specialist thieves altogether and then I'll give you an answer. Human + Lots of Money = Crook
 
I hope they never eliminate the specialist, and I hope that nasdaq transferes to a specialist system. He may be a crook, but at least he gives liquidity. Try moving 10k+ on some nasd stock that trades only 200k in a day. I can do that in 5 mins on the nyse (and I only have to give the specialist about a dime off the last print)
 
I didn't vote because my choice isn't there. Easier to get executed and the same with reading the specialist. They reduced their size for a week or 2 but have returned to the normal. Keep the specialist system, when you understand how to play the game with them it is 1000 fold better than the NASDAQ.


The 1x1 happened when the decimals came. If you want size and his bid/ask is super tight he is sitting outside the bid/offer. Penny your bid a few cents above the offer or your ask below the bid and you can usually get plenty of size.

Robert Tharp
 
Originally posted by ddefina
Someday they'll get rid of the specialist thieves altogether and then I'll give you an answer. Human + Lots of Money = Crook
More...

You realize this is a belief of yours that can have a major impact on your trading don't you? Humans that have a lot of money are always crooks huh? So deep inside you don't want to do really well as you would then be a crook? Think about this belief. Does it help you in your trading or hinder you?

I don't want to sound like I'm attacking you here either. Just making an obversation that may help you

Robert Tharp
 
As soon as specialists stop trying to prevent traders/investors from earning the spread, there will be less animosity towards them. This includes the 2 minute rule.

I think it's fine for them to take the spread on market orders from people who either don't care about the spread or are more interested in speed or moving large quantities, but when the spread is often 1-2% of the share price on moderate volume stocks (look at any listed stock doing under 100k per day) or look at the AMEX spread on the QQQ's, people get pretty angry at specialists, (and for good reason). It's like the old days when brokers commissions were always 5% of the transaction for retail customers. In fact the NYSE is no different than it was 100 years ago. Maybe they have computers now, but I bet you could run the whole thing off of a bunch of old Commodore 64's chained together. :)

Oh yeah, and what about that whole "we're not going to let ECN's into the consolidated quote" thing??? What would be the problem with forcing the specialist to route an order to an ECN that offers a better price??? The NYSE/AMEX are not free and open markets. NASDAQ, despite it's own problems, is a free and open auction. I really don't understand how one can reconcile capitalism with the NYSE.

Sure, I bet being a specialist is a shitload of work and probably takes a lot out of you, but then again is it really much harder than working a crowded Taco Bell drive through??? :) I think you probably get my point.

-nikos
 
Sorry to sound dumb but what is NX? Also, how do you execute against various parties quoting on NYSE stocks like C? Right now I see NAS, TRIM, CAES, as well as the familiar ISLAND and ARCA.
 
Originally posted by rtharp


You realize this is a belief of yours that can have a major impact on your trading don't you? Humans that have a lot of money are always crooks huh? So deep inside you don't want to do really well as you would then be a crook? Think about this belief. Does it help you in your trading or hinder you?

I don't want to sound like I'm attacking you here either. Just making an obversation that may help you

Robert Tharp
More...

Thanks for the observation. I know a big crowd of traders loves the Specialist system, and can take advantage of it, but I don't trade the tape and am looking for only tight spreads. I can only get this now on the NASD. I try the NYSE but it just isn't worth the effort unless doing multiple day swings for me. I would love it to be ECN'd to death so my stock universe can grow. This point of view seems to tick many off, but in my situation specialists are a bad thing. :)
 
We may want another category. We find it much easier to complete exectutions, and it has no effect on "reading the specialist" since when we don't use NX, we get filled between the markets (which gives us a better read on the booked orders).

Good idea for a poll, and my vote is that it is great for guaranteed pricing.
 
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