NYSE Front-Running needs to be addressed
- Thread starter hayman
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Quote from JMartinez:
HOW DO YOU PENNY A MARKET ORDER?
Can a buy market and a sell market penny each other then? Is that possible too?
Yes, possible....just ask a specialist. There are so many screwball things I've seen on the tape-it'd blow your mind. Almost all are related to "price improvement" so forget NEGATIVE OBLIGATION.
But "YES" to all your questions.
HOW DO YOU PENNY A MARKET ORDER?--Just get a NY specialist license to steal...that simple!
OK, let's think about this for another minute. A market order that gets "pennied" is helping the market order. And it is more likely that a broker in the crowd would be doing the perceived "pennying" ..not the specialist.
A stock shows a bid of 59.20, a market sell order comes in, a broker has a "not held" order that he is "working" in the crowd. The Specialist is aware of this not held order, and asks if the broker wants to pay more for this order, he chooses to do so, and the market order gets "price improvement" (over the NBBO bid).
Specialists watch many, many, stocks...and most of the trading is done by the clerks's (super good clerks, from what I've seen)...and the clerk's cannot change orders, or fill orders themselves (by pennying or anything else...they cannot even "match" two market orders).
I know it's in fashion now to blame the Specialists or even the system, but the more you know about how it really works, the better you'll feel about it. Good traders, as I'm sure you guys are, don't want to waste the energy looking for conspiracies in every trade.
Find stocks that don't "penny" you - actually pretty easy to do. I have my guys trade the stocks, day in and day out, that have tight spreads, good executions, and a Specialist that we actually get along with....hard as that might be to believe.
I believe firmly in working "with" the Specialist and the System... and it seems to be working well.
Yes, there are some bad guys, Yes, the system is not perfect, but, much like our Democartic Capitalist system, it is the best that we have...
Have fun, make money...
pennying a market order is not what we are talking about. if someone uses a market order then they get what they get!!!!! pennying a limit order may entail never being filled and watching the specialist fill himself a penny above your order and taking off in the other direction. an automated order stepping in front of me is fine (level playing field)but the specialist not posting an order in front of me and filling himself is fraud. now if someone is position trading it's not as big of a deal, but if they are constantly scalping and running into this situation multiple times a day it can get quite frustrating. i accepted it a long time ago but don't crap in my corn flakes and tell me it's ice cream!!!!
Yes, Chet, I realize the arguments...but as bids and offers change, and market orders come in, the brokers and the non displayed orders are every bit as likely to "penny" the posted bid/offer...that's all I'm saying...
Now find the few thousand stocks that don't penny...small spreads, under $40 ...should help a bit.
I hope all is going well with you...send me an email sometime to bring me up to speed!!
Don
Quote from hayman:
Don,
Thanks for your comments. I think some of us are frustrated at how the "inner circle" has advantages that we don't. That is what we are angry about. It is certainly not a "fair" market.
However, we have a choice. Be in it or not. I still choose the former.
Have a good day
Yes, but it's even scarier when we stop and realize that "we" are in the "inner circle" - I got more grief when first standing in a pit on the trading floor, from other professionals, than I ever had in the past (retail type) of situations. Now that "we are them" - the poker game is more equal...but unless we want to buy another membership and squat on the trading floor, we have to settle for "almost" inner circle...LOL
Don
Don,
Without asking you to give away any secrets, I'm curious which stocks you consider tradeable and which you stay away from, and in particular why the preference for <$40 issues. I had just kind of assumed that the lower priced ones attracted more game playing.
Without asking you to give away any secrets, I'm curious which stocks you consider tradeable and which you stay away from, and in particular why the preference for <$40 issues. I had just kind of assumed that the lower priced ones attracted more game playing.