NYSE direct plus rule change

C

cornholetrading

I just read the following on traderbulletin.com and thought it might interest some NYSE traders. Can anyone else figure out what the hell the NYSE is doing lately.

The NYSE put limits on its Direct+ auto-execution system yesterday. From now on, traders will no longer receive automatic executions if such orders are priced beyond five cents from the last sale. The NYSE reportedly made the move to reduce volatility, in connection with its new auto-quoting and liquidity quote systems. Many traders denounced the change, however, saying that the NYSE imposed the limits to revert an element of control back to its specialists, at the expense of investors.
 
I don't want to start a major argument, but I think this might be a good idea. I'm not exactly sure of all the causes, but my analysis shows that the noise level on NYSE stocks has increased by at least 2X. They are now trading like NASDAQ stocks ... which in my opinion, is bad for trading, and bad for the reputation of the NYSE as a fair and ORDERLY market.

Regards,

Slave2Market
 
Is it fair though that a specialist can widen out a spread and post a bid and offer that no one can hit or get filled at? If he shows a 1000 shares on the bid, you would think that is an indication that he should be willing to trade 1000 shares at that price.
 
I understand your desire to be able to hit bids and offers, but this MIGHT be the primary source of the extreme noise level for most NYSE stocks. I know that everybody has their own trading style, but I don't think the ultra high noise levels currently exhibited by NYSE stocks is beneficial for most traders or Specialists. It could be that the noisiness is caused by the lack of actual money-flow into the market ... but something has definitely changed in the last 6 months. Money flows have not been good for over two years, so I doubt that it is the main cause! Most traders I know are either switching to Futures or giving up on trading ... and that is not good for the equity markets.
 
I have noticed recently in many even low volume stocks the friendly specialists do things like not updating Bid or Offer and just keep printing trades lower than Bid or Higher than offer. Three years ago when I made complaints about this I was told that the specialist was very busy and did not have time to update. Now they do whatever they want, this new restriction is one more tool in specialist's arsenal, he does not even have to post 1X1 anymore all he can do just to make sure that published Bid and Offer are not executable by new rules.
Specialists exploited NX very well on a daily basis I would see stock printing let's say 21.05 and Bid blinking 21.09 hoping that somebody hits hundred shares to hit buy stop orders.
I would shift to futures but I am confused about this cancelation fees, this is something I do not get.
 
Quote from Slave2Market:

I understand your desire to be able to hit bids and offers, but this MIGHT be the primary source of the extreme noise level for most NYSE stocks. I know that everybody has their own trading style, but I don't think the ultra high noise levels currently exhibited by NYSE stocks is beneficial for most traders or Specialists. It could be that the noisiness is caused by the lack of actual money-flow into the market ... but something has definitely changed in the last 6 months. Money flows have not been good for over two years, so I doubt that it is the main cause! Most traders I know are either switching to Futures or giving up on trading ... and that is not good for the equity markets.
More...

Well NX has implemented a lot longer then the last 6 months too so who know if that is the cause or not. Your are right though about something changing. Many traders I know who did well last year are having horrible years this year.

I know a lot of traders that quit this year too. I was like your other example and switched to futures. I wish I did sooner. I no longer have to worry about fills or not getting fills as being the cause of my profitability and can focus full time on strategy. I would not mind later incorporating stocks again in the future as longer term intraday/swing trades, but no longer see the advantage/edge to trading them over the short term time frames where you are battling people that have all the info and advantage over you.
 
This new rule is total Bull@#$%!

Today for example i was short si

The last print was at .58 for 100 shares. There was an offer at .64
I tried to buy the offer at .64 with nx but it was 6 cents away from the last print. Of course i did not get the offer because my order became a limit order and the .64 was printed very quickly. Luckily someone was trying to sell 4000 shares at .62 (i saw on open book) I thought it was lucky anyway. Of course the specialist prints the 4000 at .62 and then goes right to .70 I get no fill of course which blows. Now the offer is at .79 and the market is rallying, i hesitate thinking weather i should pay up? Too late now the .79 is gone but there is some .90 if you like! What a bullsh!t rule this is. I can understand that the nyse would want to put in some sort of a rule as to how far away from the last print but 5 cents? Thats ridiculous, why not .25 or at least .15 that would be fair.

The markets are very hard to trade but i am determined to succeed! But for a market that is losing traders all the time why put this rule into effect? Do they want us gone? Don't forget a month or 2 ago they raised the per share fee that the sec takes. I for one am not impressed with what has been taking place. With the markets getting more and more difficult traders need a break. Instead they just take.

Question is there anything we can do to try to get them to change this rule back? Please everyone speak up email the nyse. Tell your firm your pissed and ask them to make a call to the nyse. What happens when your long a stock and a massive offer comes in? If its a 6 cent spread or bigger your dead!!!! If a big offer comes in at .60 and you try and sell .50, he will just print .45, if you hit market he will still print the .45 real quick only you won't be in that print sir you will be in the next one at .20 but thanks alot for coming and playing the game it was alot of fun. Now you go fight tooth and nail for three days straight and try to get your money back.
 
Quote from Slave2Market:

I don't want to start a major argument, but I think this might be a good idea. I'm not exactly sure of all the causes, but my analysis shows that the noise level on NYSE stocks has increased by at least 2X. They are now trading like NASDAQ stocks ... which in my opinion, is bad for trading, and bad for the reputation of the NYSE as a fair and ORDERLY market.

Regards,

Slave2Market
More...


Just wait until they start auto-quoting. THEN you'll see some noise. :)
 
Is this week, 5 stocks had their nx completely disabled for 1 week
to see effects of no nx on liquidity quote. Now that the liquidity quote is delayed, why did the nx still get shut off on the likes of ibm,c,pfe,gs??

The NYSE is not making sense
 
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