You ask how do we beat it?
I have been thinking about this for the last month, because I am a scalper, that is what I have always done, and what really drives me. If this continues and spreads to all NY stocks, it will drive most scalpers away.
Lobster asked why people like NYSe besides the price improvement. I will tell you my thoughts on this. When I started trading during the tail end of the bull run, I only traded Nasdaq, because it handed out money. With the changes to decimals, supersoes, and supermontage, there is no reason for my to try to scalp it. It is now a total mess as far as even getting a market soes order within a few cents, and you cant' tell what the mm's are doing as easy because they dit around showing 100 shares all day. With ecn's offering liquidity pricing to traders, everymove is instantly clogged with people trying to get their liquidity as soon as a move starts, and several other things turned me off of Nasdaq. The final one was that with the vast majority of scalpable nasdaqs being in the teen and 20 buck ranges, there are not decent ranges.
Nyse provide stocks with good ranges because they are higher priced. You only have to watch one "marketmaker" instead of concentrating on 50 MM's and 6 ecn's on what they are all doing. There are usually good spreads to scalp in between, more similar to Nasdaq in fractions where you could slice in between the 1/16's to get to front of line, by giving up a bit of price. And up until the last few months, I would get regulat, almost daily, price improvements of 10 cents to even a dollar on certain big moves, where the specialist would just for a dollar or two, you offer in low and get put in the big print with all the markets. Yes, two minute cancels do suck, but 95% of the time, I get a cancel within 5 seconds, and I can live with that.
If they take away price improvement, it will turn many scalpers away. That is the biggest turn on to me of NY stocks. And not getting it as regularly has made it a lot harder for me to make money the last month.
Dalegrief brings up the option of futures. If I have to learn to position trade, that is where I will do it, because there is no reason to trade stocks, IMHO, if you are a position trader, because you get the same chart set-ups and large trends in futures, for 20% of the cost to trade. And you could free yourself from these idiotic stock firm owners who make way too much money off of all of us. And you could sit in your home with a cable modem and trade, from anywhere in the US or abroad. Sounds tempting to me, but I still like to scalp and that is what I will continue to do until I can't make any money doing so.
