does anyone know what the average specialists makes in a year??
How much does a specialist make??
- Thread starter jpomerenke
- Start date
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I had a trader who was a floor specialist since the 70's....back then he handled dupont or georgia pacific ( i can't recall)...it was a well known firm and his exact quote to me was: "from 1972 to 1985 if you bought or sold it i made an 1/8th of a point on every share".....needles to say he retired young.
on the other hand, he also had to make markets if there was none...ie. give up an 1/8th to keep everything orderly.
I think decimalization and the emergence of third markets has crimped their huge profits but the bottom line is they still do very very well.
on the other hand, he also had to make markets if there was none...ie. give up an 1/8th to keep everything orderly.
I think decimalization and the emergence of third markets has crimped their huge profits but the bottom line is they still do very very well.
Sometimes, I wonder how they do it.
I was trading GD the other day (an $80 stock) during the first hour, and it was wandering around a 25 cent range, with a 0.05-0.15 spread for long periods of time, printing a couple hundred now and then. Before decimalization, that range would have been a buck, probably with a 0.50 spread.
I'm guessing that they make most of their money at the open and at the close. Kind of like no-limit poker - "hours of boredom, punctuated by moments of terror".
I was trading GD the other day (an $80 stock) during the first hour, and it was wandering around a 25 cent range, with a 0.05-0.15 spread for long periods of time, printing a couple hundred now and then. Before decimalization, that range would have been a buck, probably with a 0.50 spread.
I'm guessing that they make most of their money at the open and at the close. Kind of like no-limit poker - "hours of boredom, punctuated by moments of terror".
you are correct....as this one former specialist once told me.."it was like printing f#ing money every day!!"
but with the decimals it's a much tighter spread, BUT they are not starving...remember this: In 1970's and 1980's volume on the entire exchange for a particular stock is probably traded in a day now....I remember one old timer telling me that MSFT volume today exceeded the TOTAL volume of the EXCHANGE in 1970 something.....think about it: would you want 1/8th on 100,000 shares or 1 cent on 50 million shares?
but with the decimals it's a much tighter spread, BUT they are not starving...remember this: In 1970's and 1980's volume on the entire exchange for a particular stock is probably traded in a day now....I remember one old timer telling me that MSFT volume today exceeded the TOTAL volume of the EXCHANGE in 1970 something.....think about it: would you want 1/8th on 100,000 shares or 1 cent on 50 million shares?
with ECNs being able to trade (and price improve) listed spreads, there's no reason - no #@#!$ reason - why anyone with sufficient capital couldn't be an off-floor specialist. you can make 1/8 point for every share traded as well, provided you know when to cut losses and all that other crap that goes with being a good trader....