HYBRID, good news.

Quote from Don Bright:

[BThis will be a fun few months until the NMS rule kicks in (Feb). More adapting, and I've asked for input from all my traders... see how best to adapt to these changes.

Don [/B]
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Which NMS rule are you referring to Don and how do you feel it will affect day trading?

Thanks
 
Quote from Don Bright:

The win loss rate with price improvement is extremely high. The "specialist bashers" would even agree...it's because we are "on the same side" as the specialist when this happens. He may get "picked off" once in a while, but not often. Simple strategy...."trade with the guy who makes the money, not against him".

Don
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I'm not going to argue with success. What I'm saying is, in theory , getting price improvement alone does not make the trade profitable, you need the retrace.

You're saying you rarely get filled and then have to chase a runaway stock to cover.

Why don't you do the same thing on Nasdaq, just envelope, and hope you get filled on spikes in either direction that can be covered. Happens all the time, but it's not my style.

If I understand you, the fact that you get printed at the best price on NYSE is the key, so you don't have to hope you've traded at the extreme.
 
Not understanding who's going to take the market orders on nyse? If everyone wants the .002 rebate from arca who's going to post orders on nyse that you can ding? they're going to post on arca to get the rebate. This is just the first phase in shifting vol away from the specialist. Everyone thinks they'll get there .002 from arca when buying at a limit and dumping at the market on nyse for no charge. Won't work that way
 
Quote from Don Bright:

You have it right, simply placing orders on ARCA book vs. NYSE. No (silly) credit trading for credit sake alone. Keeping things legal, as I mentioned above. If we're going to provide liquidity to a marketplace, we want to maximize our profit potential.

This will be a fun few months until the NMS rule kicks in (Feb). More adapting, and I've asked for input from all my traders... see how best to adapt to these changes.

Don
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This all sounds completely counter-intuitive. All youve done is made ECN trading more expensive. Most day traders I know use ECNs to pick off when unexpected moves occur. Providing liquidity on arca doesnt solve the problem of not getting price improvement. The math doesnt add up.
 
If you send an order to take liquidity on the NYSE (SDOT or NX)and there is a better offer on ARCA, will the system give you the better ARCA bid/offer but only charge you the NYSE fee (.00025)?

And if you are offering out on ARCA and you are inside the NYSE (bid/ask) and somebody send an order to buy SDOT or NX, will the inside ARCA order get hit with the .002 rebate. Am i understanding this correctly?

Thanks
 
Quote from slidertrader:

This all sounds completely counter-intuitive. All youve done is made ECN trading more expensive. Most day traders I know use ECNs to pick off when unexpected moves occur. Providing liquidity on arca doesnt solve the problem of not getting price improvement. The math doesnt add up.
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Our traders rest orders at predetermined price levels based on corresponding (available) bids and offers of paired off stocks and indexes. I doubt that the payments will add up to the missed price improvement we enjoy now, but at least we're offsetting (by 10 times) the new routing fee to the NYSE and adding something to the profits.

We rest orders for other reasons when making markets, of course...may as well get paid for doing so.

Our pricing arrangement with Goldman allows our traders to choose which way they pay. They can go "all in" without concern for providing or taking liquidity or they can choose to pay for and receive liquidity payments. Now we have a way to receive without paying, and the NYSE will have to re-route to ECN's if there is better bids or offers.

Perfect, of course not...but better, absolutely.

Don
 
Quote from NYSEtrader123:

If you send an order to take liquidity on the NYSE (SDOT or NX)and there is a better offer on ARCA, will the system give you the better ARCA bid/offer but only charge you the NYSE fee (.00025)?

And if you are offering out on ARCA and you are inside the NYSE (bid/ask) and somebody send an order to buy SDOT or NX, will the inside ARCA order get hit with the .002 rebate. Am i understanding this correctly?

Thanks
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Good questions, and I am passing them on to the NYSE right now. My guess is that the NX orders will be filled immediately as they are now (at least until Feb when NMS kicks in). If the order is re-routed to ARCA, then maybe the "taking liqudity" fee will be charged (but if you're paying .003 and saving .01, then it's worth it).

Only if you rest orders on ARCA will you be paid. The proactive taking of liquidity has the fee.

I'll follow up Monday.

Don
 
Quote from stock777:

I'm not going to argue with success. What I'm saying is, in theory , getting price improvement alone does not make the trade profitable, you need the retrace.

You're saying you rarely get filled and then have to chase a runaway stock to cover.

Why don't you do the same thing on Nasdaq, just envelope, and hope you get filled on spikes in either direction that can be covered. Happens all the time, but it's not my style.

If I understand you, the fact that you get printed at the best price on NYSE is the key, so you don't have to hope you've traded at the extreme.
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Our traders make extra $$ with price improvement a couple of ways. As you say, the (more often than not) retracement is always great. But the pairs traders get an extra boost. If, for example, they have an offer to sell short at .10, leaning on the other stocks offer at .18 for example (meaning that they want to pay 8 cents for the spread, and they get price improvement on the sell side, and still get the buy side done, they may buy the 8 cent spread for 3 cents (bigger numbers in reality of course).

We do the same thing on Nasdaq, we do rest orders at specific prices, and when hit take the other side (or at least evaluate the spread at that time, based on market factors, etc.).

Don
 
u may make money but sure it's lame if u ask me.
Quote from Don Bright:

Our traders make extra $$ with price improvement a couple of ways. As you say, the (more often than not) retracement is always great. But the pairs traders get an extra boost. If, for example, they have an offer to sell short at .10, leaning on the other stocks offer at .18 for example (meaning that they want to pay 8 cents for the spread, and they get price improvement on the sell side, and still get the buy side done, they may buy the 8 cent spread for 3 cents (bigger numbers in reality of course).

We do the same thing on Nasdaq, we do rest orders at specific prices, and when hit take the other side (or at least evaluate the spread at that time, based on market factors, etc.).

Don
More...
 
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