NX rule- compliance issue?

J

jmathers34

Someone in the broker ratings said that if one trader at a prop firm NXs a stock the 30 second rule (cant enter another NX order) is in effect for every trader at the firm trading that particular stock. Specifically he said,

"The NX rule is a compliance issue...Other firms who have violated this rule are indeed in trouble with NASD and NYSE. There has to be that 30 second delay between all traders at prop firms. Firms that let all their traders just execute NX trades have had their red flags raised."

Does anyone at Bright or Echo or any other firm know if this is true?
 
I know it's true. I don't know if all firms do it, but apparently, if they are being honest, the prop account is treated as one account and therefore the exchange sees every prop order from that firm as coming from one account. bummer, huh?

I just wonder how much of my nx blues are caused by that. If the nicee wants nx to be a real ecn, they need to get off that silly rule anyway, and all the other silly rules that prevent it from becoming an ecn. But they won't, because what will the specialist do?
 
I hope the regulators don't subject the 30 second NX rule on a prop firm basis per stock but on a per trader basis per stock else there would be a big mess out in propland.
 
Actually the conglomeration of a prop firm as one huge firm is sort of fair because the NYSE treats this the same for member firms. For example, when I was trading for a top tier investment bank, the firm had to net all positions. Thus, if I had a long position, but the firm had a net short position, I would have to liquidate positions on an uptick or zero plus tick.
 
So what you are saying is that if the SRO's stay consistent with their definition of what an account should be then a prop firm should impose the nx 30 second rule on a per firm per stock basis else big mess?
 
Originally posted by stOckman
nyse nx is awesome
i love the nx order type. it depends what firm you work for when using nx. for example worldco has all their traders in the same prop account thus all being subject to the same 30 sec rule. in other words if there is stock available on the offer and if someone in worldco nx's the offer, no one else in wordlco can nx the offer b4 the 30 second time frame is up. they don't have real nx at worldco............yes i work at andover and did work at worldco. andover sets up each trader with an individual account. at worldco its one account for everybody. worldco is the only place i know of that does this.
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just my two cents, (my ten cents is free) this sounds more accurate than the previous stated opinion that was written by a worldco trader on the broker's ranting, uh um, i mean ratings page.
 
Chasinfla is 100% correct in the way the NYSE and NASD interprets the NX rule. His characterization as one big ill tempered person with a 1000 personalities is dead on. Great analogy.
 
I considered trading at world co. The main reason i chose not to was because of their nx rule. WHen you want to get a fill on a trade, your best bet is nx.
 
Originally posted by chasinfla
I know it's true. I don't know if all firms do it, but apparently, if they are being honest, the prop account is treated as one account and therefore the exchange sees every prop order from that firm as coming from one account. bummer, huh?

How does Bright Trading handle their nx trades?
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