Hatred of the NYSE
- Thread starter eagle488
- Start date
Whenever there is change there is opportunities!!!!
positives
1. rebate trading now on listed +
2. arbing slow markets+
3. no more bitching about the specialist++
4. market opens on time+
5. faster moves = more imbalances that are too extreme
negs
1. higher fees.
2. fragmented market
There is a case from 1990s that proves you completely wrong. When IBM reported bad earnings and did not open till after 10am. The specialist took in 250k shares on the opening print of 1mil. Within 30 minutes the stock ran up 4 points or so and the specialist made over a mil.
Who do you think that money came from? There was a big argument that the specialist made the opening price way below what it would have been if it was a purely electronic market. Some institutions were really pissed and sued.
I'm surprised you cannot figure out that the specialists "provide liquidity" by leaning on someone else and stealing their fill. Specialists don't take risk, they only take rewards.
Once you pay more attention to the facts and not the supposed claims & explanations by the NYSE board, you will see that every auction style trading floor is mostly a scam & gimmick for those who are part of the floor. That is unless the blatant conflict of interest in the specialist duties does not hint it to you.
That reminds me of back in '97 or around there, i think it was MOT, It was trading down almost 15 preopen. The stock opened +1/8 at 9:30:01. Caught most everyone off guard, the next print was down 5, then quickly dropped another 5. Gave all new meaning to "you snooze you lose". I always wondered how much of the opening print was the specialist.
As far as I can see, the specialist rarely provides liquidity. He is merely an order matcher. Thats all he does 90% of the time. It is very easy to see when the specialist is providing liquidity. If you see size quoted on the level 2 box by nyse that is not in the open book, then that is the specialist providing liquidity. Whenever there is a lack of orders on the book, and a big buyer comes in, he spreads way up and waits for sellers to come in on the book so that he can try to match it. If not, he spreads even higher. I'm sorry, but that is NOT providing liquidity and it is FAR from taking risk.
I saw Don Bright say somewhere that the specialist rarely provides liquidity these days and that they only match orders and get paid for it. If he says that, then I wouldn't argue with him since he was a floor trader at one point and he knows what he's talking about.
However, the specialist does provide liquidity at extreme points. For example, when a stock shoots up 5 points in 30 minutes and he sees that the buyer is done, he keeps selling(shorting) and refreshes his offer on the level 2 screen. Thus, he is providing liquidity only when he knows that he is guaranteed a profit.
I saw Don Bright say somewhere that the specialist rarely provides liquidity these days and that they only match orders and get paid for it. If he says that, then I wouldn't argue with him since he was a floor trader at one point and he knows what he's talking about.
However, the specialist does provide liquidity at extreme points. For example, when a stock shoots up 5 points in 30 minutes and he sees that the buyer is done, he keeps selling(shorting) and refreshes his offer on the level 2 screen. Thus, he is providing liquidity only when he knows that he is guaranteed a profit.
I read a rather funny yet absurd headline on the bloomberg either Tues or Wed,
"US justice drops (suit)charges against 5 NYSE Specialists, "It is not in the interest of justice""
Unreal, my partners and I couldn't stop joking about how crazy this system really is.
As for Hybrid stocks, on NBR last week there were rumors of a take out. One of the exec's came out and denied it. The specialist spread that thing down and printed size shares down over 1.50...then the next print was .50 up.So much for HYBRID...The LRP is another way to keep the specialist employed.
Hey, everything can be gamed it just takes a bit of work.
"US justice drops (suit)charges against 5 NYSE Specialists, "It is not in the interest of justice""
Unreal, my partners and I couldn't stop joking about how crazy this system really is.
As for Hybrid stocks, on NBR last week there were rumors of a take out. One of the exec's came out and denied it. The specialist spread that thing down and printed size shares down over 1.50...then the next print was .50 up.So much for HYBRID...The LRP is another way to keep the specialist employed.
Hey, everything can be gamed it just takes a bit of work.