If your asking listed daytraders who trade in/out, hybrid is a big negative because so many listed daytrading strategies were based on the specialist system. I see the loss of price improvement at market order to have effect on daytraders who average less than a nickel profit on total shares traded for the day.
How has the transition into the Hybird market change your short term trading strat?
- Thread starter cypresspoint16
- Start date
i have seen this trend already in past month with prop traders essentially lowering volume >50-75%. then you have to wonder how firms will take a >50% loss in revenue via commissions especially to those firms who don't take a cut in p&l.
Quote from Steve Tvardek:
Its all about r/r. If you are scalping and you are risking 3 cents to make at least 6, you have a nice 2:1. Same thing applies to longer intraday frames. I may risk, .15/.20 but am looking to make .30-.40 (stock dependent of course). The key is you have to know what you are doing when you take a position w/ more inherent risk. You have to have good reasons and have things thought out in advance before the trade is even placed. I'm only looking to place 2-5 trades daily, but each one I do is for a very solid reason (based on my methods)
When I was scalping doing 100K+ shares a day, sometimes I would just jump in on instict. Now I have more well planned reasons, I know where I am getting out if I'm wrong and knowing about where I should take some profits, all profits etc. The exit is by far the hardest part I feel (at least for me). I am good at sniffing low risk entries, exiting is more a challenge.
I'm not suggesting you cant still scalp NYSE, I'm sure there are new methods and techniques to take advantage of the hybrid, I am just using this opportunity to trade longer time frames. Thinking 5 years from now, would I really want to still be banging in and out 300+ trades a day? Probably not
Marketing is asking to get raped. There's no need to go market, now that you can auto-exec more than 1000 shares - and the liquidity on ECNs is huge. The only time I'll ever go market is when a position is moving against me and I miss a limit out and don't have a good out on ECNs. Sometimes I get fucked for 10 cents, sometimes I get an okay out. Those situations can be avoided. The game is harder and different now, but to say that it can't be played is naive. The hybrid market is designed to the distinct disadvantage of NYSE specialist readers, I agree in full. I would be stupid not to. Short term scalping strategies have to be adapted, and there can be more risk in certain situations, but it can be by and large avoided... or even used to your advantage. Try limiting bids 10 cents below the market, or offers 10 cents above, waiting to get filled on a market sweep. You'll be able to sell (or cover your short) on ECNs at an immediate profit 90% of the time.
I was worried in December but I seem to be doing quite alright, even with scaled-back exposures while I learn the new ins and outs.
It's nice to be able to get shares instantaneously, zero slippage, with an ISLD RASH remove liquidity order.
I find that certain "scalpers' bread-and-butter stocks" have been rendered useless for scalping by the hybrid system, but many other stocks have renewed opportunities. In particular, level camping some thin stocks on busy days has yielded some good fills on sweep orders, but it's a tactic I definitely need to explore in a lot more detail. But some stocks whose momentum seemed to be choked by too much volume now seem to be good for scalable size scalping.
There are some limited opportunities add liquidity on NYSE and get hit on a sweep while the ECN Level 1's don't move, but these opportunities will probably vanish during Hybrid Rollout Phase IV when those sweeps hit all ECNs. My guess is, when this happens scalping will be very similar to the way it is on Nasdaq now (which isn't news to anyone).
Summary: no profitability setbacks here, I've barely missed a beat. Lots of new opportunities and I'm pretty confident Hybrid will be very beneficial to me in the long run!
It's nice to be able to get shares instantaneously, zero slippage, with an ISLD RASH remove liquidity order.
I find that certain "scalpers' bread-and-butter stocks" have been rendered useless for scalping by the hybrid system, but many other stocks have renewed opportunities. In particular, level camping some thin stocks on busy days has yielded some good fills on sweep orders, but it's a tactic I definitely need to explore in a lot more detail. But some stocks whose momentum seemed to be choked by too much volume now seem to be good for scalable size scalping.
There are some limited opportunities add liquidity on NYSE and get hit on a sweep while the ECN Level 1's don't move, but these opportunities will probably vanish during Hybrid Rollout Phase IV when those sweeps hit all ECNs. My guess is, when this happens scalping will be very similar to the way it is on Nasdaq now (which isn't news to anyone).
Summary: no profitability setbacks here, I've barely missed a beat. Lots of new opportunities and I'm pretty confident Hybrid will be very beneficial to me in the long run!
i trade mostly naz. what does inet charge to take liquidity on nyse stocks? also i've traded a few nyse stocks like xom and i've still noticed if the stocks moving fast they still won't fill arca instantly. they hold the orders. is that the trade threw rule? so no ecn can trade above the nyse correct?
As of Jan. 1 t's the same charge as Nasdaq... $3 per 1000.
Yeah, there was a trade-through rule preventing ARCA from executing at prices better than NYSE was showing, but I think with routing it can be a moot point-- your ARCA cross can still hit shares, the shares will just be on the NYSE level. I'm not sure how hybrid has changed the trade-through rule.
They jack up fees for data, charts, software, VPN Client (remote) and etc. A transition toward desk fee type model like with futures.
Funny, so why aren't you a millionaire yet being that Nasdaq has been like this for years?