Quote from AutoMate:
Ohh , and if you want an example of how all this works and how the specialist will treat you when he has you by the balls check out madmunny ' s little experiment from a couple of Friday's ago on the P/L 2006 thread. When you try to market out of a position the specialist is not your friend. Another interestesting example although a little different would be MNX's trade from a couple of Friday's ago as well. It can be found on the same thread a couple of posts apart.
Quote from B1010:
Your basically just asking is the size still there.. The answer is yes the size is there its just the specialist doesn't have time or he refuses to update his quote on the tape. But if you were to send a market buy order during this you would most likely get filled on the size which is still stepping on the book unless the specialist has orders in front of yours. Sometimes you will see when this is occuring and the specialist hasn't updated his quote lets lets say a 50k share offer is stepping down. You may see some jerkoff panic and nx the offer causing all 50K shares to step back on the book. So thats another example showing the size is still there and real.. Whether or not the specialist is going to let a bunch of daytraders out by letting them just nx the offer is another story. I usually trade ecns in this situation.. Don't like giving my order to the specialist in this situation unless he gaps way down.
Quote from B1010:
FastandFurious... One more thing.. If I were you I were start learning a new strategy beside market shorties stepping down. That strategy being very profitable has been over for a year or two now. And I believe it won't be long until the entire stock exchange goes REG SHO. There is no reason that the NYSE stocks need an uptick rule and I wouldn't be surprised if within the next year nearly all if not all NYSE stocks do not need an uptick for shorting just as the pilot test stocks do not need one now. Then there will be no more large short sellers stepping down.. The institutional sell short market orders will be invisible.
Quote from B1010:
Lets say the quote is 100 x 50,000. 40 cents x 50 cents.. So the price downticks to 45 cents lets say.. so then the 50K shares steps to 46 cents.. Now the open book shows the 50K shares at 46 cents.. but the NYSE quote still showing an offer of 50 cents becuz the specialist chose to not update his quote.. Then you see some panicked daytrader nx the 50 usually not realizing the size has now stepped down to 46 cents.. so then on the book the 50K shares steps back from 46 cents to 50 cents again becuz thats the new price where that 50K short seller can legally get short.. Thats all I was saying with the previous example.. the size is really there.. whether or not the specialist will let you out is a different story..
Quote from B1010:
I think the days of cutting in front of market shorts will even be harder.. and like I said before with all the new implementation of the exchange going more electronic (hybrid). I see no reason for the exchange to keep the uptick rule. It only hurts the big institutions when every daytrader on the street can see the institutions market orders and cut in front of them. I'm sure most will lobby to take away the uptick rule for good and they are already partially there with the Reg SHO pilot stocks.