No more .001 scum orders

Pumpanddump · Apr 6, 2005

I read the new rule that the SEC passed today. Does this mean that we are not going to be able to put orders out there for thousandths anymore?? (i.e . 5.052, 4.301)

Here is part of the text of the article citing the changes:

The SEC's approved changes affecting U.S. stock markets and how they operate also included limits on the use of stock quotes in fractions of a penny and on the fees that markets charge for access to quoted stock prices.

momo trader99 · Apr 6, 2005

rebaters the game is near over
no more shaving
no more locking markets
max ecn can charge 3/10 meaning no more high attn or trac rebates

try p/l now

stock777 · Apr 7, 2005

Since the avg rebater has made 2-3 million in the last 2 years, they can all retire, and let you fight it out for the remaining pennies.

Cre8UrF8 · Apr 7, 2005

Since the avg rebater has made 2-3 million in the last 2 years

Yeah, 2-3 million dollars in commissions, and about $2,000 of profits in their own pockets.

Longhorns · Apr 7, 2005

Quote from stock777:

Since the avg rebater has made 2-3 million in the last 2 years, they can all retire, and let you fight it out for the remaining pennies.

Dumbest quote ever on ET.

I know 6 guys who tried the rebate game over the last 3 years. Not a single one of them made money FOR THEMSELVES (made the firm a ton though)...and none of the guys are still in the business.

heavy · Apr 7, 2005

I've never seen a "rebate" trader consistently profit. If any exist, they are definitely the exception to the norm.

putladder · Apr 7, 2005

The Reg NMS passed but I'm not sure when all of it goes into effect. Some of these rules are going into effect next year. I called the SEC and they said they are going to put up a full press release "as soon as possible".

wilburbear · Apr 7, 2005

Quote from momo trader99:

rebaters the game is near over
no more shaving
no more locking markets
max ecn can charge 3/10 meaning no more high attn or trac rebates

try p/l now

The SEC is taking away the ability to trade inside the penny. Have they essentially restrained competiton in a way that is good for the automated traders? What if they conspired not to step in front of each other in fractions of a penny? Wouldn't that be good for them? Hasn't the SEC just mandated that?

Also the quote above essentially says, "no more locking of the markets". A "locked" market in my experience is bid = ask. (An example of a "crossed" or "inverted" market is bid higher than the ask). Are all locked markets in ECN stocks subject to automated executions so that such a lock doesn't present a problem in the movement of the stock? Are "crossed" markets in ECN stocks also subject to auto executions so that they are quickly traded for the arb opportunity?

I have seen a few "inverted" markets in equities where a smaller exchange crosses with the NYSE. Can automated traders execute against the ECN and then arb the trade to the NYSE on direct-plus (subject to the size rule on NYSE)?

Finally, I see some inverted markets in equities that don't go away for a few minutes and are annoying because you know the real market is away from that stale price. Is this only a "tech" problem of some sort? If not, which exchanges are most likely to
display these stale prices?

stock777 · Apr 7, 2005

Quote from Longhorns:

Dumbest quote ever on ET.

I know 6 guys who tried the rebate game over the last 3 years. Not a single one of them made money FOR THEMSELVES (made the firm a ton though)...and none of the guys are still in the business.

That's what they wanted you to think, so you wouldn't muscle in on thier game.

See that Yaught passing by? Rebaters.

catima · Apr 8, 2005

The average rebater I know of, was making an average of 3000$ a month trading rebates on SIRI & the likes.. then again, thats not really counting the WCOM days, when rebaters were pulling in 10000+ in net profits for themselves. And I'm referring to rebaters trading with at least 10k+ default, anything less would be a waste of time. There were some people that were pulling a lot more that perfect the strategy, and in the summer months were more profitable then us, momentum traders, but it usually balanced out. I could never get into the style myself, although I honestly tried, I just don't seem to have the personality and style suited for it.

Quote from Cre8UrF8:

Yeah, 2-3 million dollars in commissions, and about $2,000 of profits in their own pockets. [/B]