Another: I enter a market short with the bid at 23.93, a 0+, and theres size there. Zip. A one lot prints a penny higher....now I can't get filled at the bid. No other prints. Down goes the bid ("customer cancelled") and I'm the offer (or at least I'm supposed to be).... Coincidence? I don't believe in coincidences.
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Games specialists play
- Thread starter chasinfla
- Start date
Originally posted by Vinny1
I also noticed that sometimes you go to hit a bid and you get offered there or you go to take an offer and you get bid there,all without the stock trading there.I wonder how often these are cases where the specialist is just posting a fake size to entice buying or selling to benefit his position.
Even in thin markets in futures, you must honor your bid. No one will trade with you if you don't honor quotes.
Now there are times of the day were a trader is bidding with the idea the he really doesn't want to get filled. But you have to be careful with that. If you bid is too enticing a floor broker (who seems to be completely inattentive) will suddenly turn around and hit your bid. At which point you must honor your quote.
the floor is one thing...even on the NYSE the 'crowd' and the specialists work together. It's off the floor where the real screwing takes place.
I don't think what I described is necessarily 'front running.' He might front run, but he already has the order matched. He's just using it for his advantage now.
I don't think what I described is necessarily 'front running.' He might front run, but he already has the order matched. He's just using it for his advantage now.
How would you characterize a fair and orderly market? One in which the specialist doesn't make money? Or one in which you don't lose? Why would you panic and cover a short just because some idiot bids for 100k? Stocks usually trade to size. remember that old maxim? Second if the stock has been in a downward trend all day or for a few days for that matter and you got short because you were going with the trend and not because you were just trying to race the next order or usurp the specialists role of providing liquidity then if the stock traded on the bid of 100k that would confirm the down trend and the money outflow theory of why you originally got short. If your trading style is to get in front of large orders for a few cents then go back to the NASDAQ mkts. If you are adept at picking direction, then that order would not have fazed you unless it started to chase the stock up. The specialist probably should have included your order in the print or waited until after the print to fill you. Did the specialist go long on the print? Was he risking his capital and taking a position by buying on a downtick on the bid when no one else was willing? They pay you for taking risk.
Having gotten that off my mind, I still think the specialists do play games. What the NYSE offers that you can't get in the OTC market is that you can't get traded through if you already have strapped on a set and put a bid or offer in the system. The fairness of the rules, the level playing field outweighs the games they play. What about spoofing on the OTC? Games galore there... another thread I would think.
Having gotten that off my mind, I still think the specialists do play games. What the NYSE offers that you can't get in the OTC market is that you can't get traded through if you already have strapped on a set and put a bid or offer in the system. The fairness of the rules, the level playing field outweighs the games they play. What about spoofing on the OTC? Games galore there... another thread I would think.
Originally posted by PuffyGums
I would say front running is not a common practice in futures exchanges anymore. Although the crude oil and some metals pits are supposed to be very 'clubby' still.
you sure about that???
When the brokers get huge orders to buy/or sell stocks in our market place. They usually have to guarantee a certain price to their client. To do this they go into the futures market first during afterhrs/premarket and hedge themselves. ie frontrunning the stock order with a futures order.
They can they do the stock transaction which pushes the futures in their favor. They broker can then close out the position in futures. This is one of the reasons futures usually lead the stocks.
Robert
why, oh, why, do people think in polar extremes? If not "A", then "-A"?
I would say that a fair and orderly market cannot exist without market makers who honor their quotes, and do so transparently. That seems to be the issue at the NYSE.
I don't trade OTC. Can't comment.
Panic? No. Risk control. Once I saw that print I new I had been had. Incidentally, I tried to cancel the entry order...I guess it just didn't suit the specialist to let me do that.
The Labranche example was cited because people normally think that specialists lose money by 'maintaining order' in sell off markets. The stats say it just ain't so.
I would say that a fair and orderly market cannot exist without market makers who honor their quotes, and do so transparently. That seems to be the issue at the NYSE.
I don't trade OTC. Can't comment.
Panic? No. Risk control. Once I saw that print I new I had been had. Incidentally, I tried to cancel the entry order...I guess it just didn't suit the specialist to let me do that.
The Labranche example was cited because people normally think that specialists lose money by 'maintaining order' in sell off markets. The stats say it just ain't so.