NYSE trading Dead?? Hybrid??? End of alot of traders

Quote from bjb1963:

So VERY VERY TRUE. I don't understand you people that want to get rid of the specialist. The specialist is VERY MUCH my FRIEND. I really don't get it.
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Because some traders do not rely exclusively on the tape reading edge but exercise other strategies. If you are trading sector stocks which are dominated by hedge funds, the specialist is only a hinderance that cause trade speed delay and additional slippage. There is zero benefit from the specialist, he is only a maggot that has absolutely minimal affect on the stock price.

The efficiency argument is very flawed, the only big innefficiency created by the NYSE system is the slower moving quotes and delayed Open Book, the only reason so many daytraders are NYSE only traders. Nasdaq has much higher percentage moves, fast momentum, so why is it daytraders are so afraid of those opportunities. Nasdaq stocks, by far, have some of the most irrational price movements, need you all be reminded of BIDU? It's plain and simple, the computers are faster and better in the short time frames, it's not the inefficiencies created by the specialists. Those innefficiencies are created for the good ole boys club not the average daytrader.
 
Who the inefficiencies are created for is of little importance. Their existence allows far more than the "good ole boys club" to take advantage of them.

Another point is that some here hate the specialist and his games. They want to do away with the spec. so they can get their lightening fast fills, etc. TO play the other side, I'll say fine. The problem there, from a big picture standpoint, is that whether or not you personally take advantage of the particular inefficiencies created by the specialist system, you still must look at the long-term point for traders. We need inefficencies. As traders, the best thing to do, OVERALL, is to advocate systems that help create and leave inefficencies around, so that trading opportunities remain abundant, even if you aren't a proponant of a given system. If different groups keep advocating to knock down this system, and that system, you wipe away various inefficencies that exist. Not a good thing, OVERALL, for traders.

There will always be inefficencies, and some will come and go, but a market without inefficencies is a market that does not exist. So fret not, and just trade with the circumstances you are dealt with.


Quote from Hydroblunt:

Those innefficiencies are created for the good ole boys club not the average daytrader.
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So then why not trade NAZ and let others, who understand that game, worry about NYSE? Or is this just a philosophical discussion?

nitro
Quote from Hydroblunt:

...Nasdaq has much higher percentage moves, fast momentum, so why is it daytraders are so afraid of those opportunities. Nasdaq stocks, by far, have some of the most irrational price movements, need you all be reminded of BIDU?...
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Every specialist is different just as every trader is different...you learn to stay away from some and trade more with others. However, anyone who thinks the NYSE specialists are working against you should trade with an AMEX stock/specialist for a day--those guys are crazy. A few years ago I spent a week trading SPY using an AMEX specialist to see if there was an edge to be found...the edge is all theirs. One example of what these guys can do: I have a limit order for 1000 SPY a few cents under the bid and I cancel; the order is held for over a minute and the price is now 0.50 under my limit bid; he then fills me at my limit price, not the current offer--instant $500 loss. NYSE rules would never allow that. I'll take the worst NYSE specialist over the 'best' AMEX one.

I would hate to see the NYSE specialists go...hopefully they will always be around. As for the hybrid system, who's to say there won't be an even better edge found in that? The ability to get price improvement with the spec and utilize an "ECN-like" system at the same time sounds interesting.
 
I don't think I am way off base here but price improvement availability and ECN like execution would be a contradiction in terms. Price improvement comes from the spec grabbing the order and "walking it down " or up for that final clean up print with which the NYSE traders thru their scale /envelope order get to participate. With Reg NMS the sepc prob won't have that order "captive" for more than 1 second.
 
Quote from GATrader:

I don't think I am way off base here but price improvement availability and ECN like execution would be a contradiction in terms. Price improvement comes from the spec grabbing the order and "walking it down " or up for that final clean up print with which the NYSE traders thru their scale /envelope order get to participate. With Reg NMS the sepc prob won't have that order "captive" for more than 1 second.
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The hybrid system has various execution options and algorithms available. see http://narrowcast.nyse.com/hm/frame.html
Price improvement is clearly stated as one of the benefits of choosing the specialist for execution. What I'm saying is that a possible arb situation could result by offsetting a price-improved order via one of the electronic execution methods made available by the new system. In fact, on a small scale this is already being done this every day by traders using inet or arca to offset a trade after a favorable fill by a specialist.
 
there is little to no improvment now and as far as i see it, the nyse is already electronic, the lack of deadbeat dbab etc etc mm's
will always make it better
 
What I don't understand is even without the looming implementation of Reg NMS, why are pools of liquidity for listed stocks still mostly in NY and not on the ECN's. I know liquidity begets liquidity but given the success of ECN's in Naz stocks the past 3-5 years,how come there are few size bids/offers for the GM's IBMs',SLB's in ARCA ISLD. Why are they still in NY despite the perceived shortcomings of the specialist system.

Are there rules preventing traders from leaving NY or at least giving some of their orders to the ECN's .I am not talking about daytraders putting 500-100 sh bids/offers. I am talking about the Fidelities of the world (who brought up the initial draft of Reg NMS BTW) from putting out bids/offers in size for their listeds at ARCA/ISLD.

I am truly perplexed.
 
Quote from GATrader:

What I don't understand is even without the looming implementation of Reg NMS, why are pools of liquidity for listed stocks still mostly in NY and not on the ECN's. I know liquidity begets liquidity but given the success of ECN's in Naz stocks the past 3-5 years,how come there are few size bids/offers for the GM's IBMs',SLB's in ARCA ISLD. Why are they still in NY despite the perceived shortcomings of the specialist system.

Are there rules preventing traders from leaving NY or at least giving some of their orders to the ECN's .I am not talking about daytraders putting 500-100 sh bids/offers. I am talking about the Fidelities of the world (who brought up the initial draft of Reg NMS BTW) from putting out bids/offers in size for their listeds at ARCA/ISLD.

I am truly perplexed.
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Perhaps because the changes to the trade-thru rule are not yet in effect, and this helps to tip the balance in favor of keeping most liquidity at NYSE. The new NMS trade-thru rule, when it becomes effective, should change the picture at least a little, maybe a huge amount.
 
I am still a bit fuzzy on trade thru rules which are in effect now for I route all my orders to NYSE. But I was experimenting with using ISLD and routed a sell 100 to route ISLD at .08 when the NBBO was .10B .12 offered on a stock at the NYSE. Surpisingly, I got filled at .08 so in effect I traded thru the NBBO. I asked a neigbor at Lava who is really familiar with routing and he said that as long as the routes don't originate at NYSE it can print outside the NBBO. I don't know if he misunderstood or I misunderstood. I have always thought that in listeds you can't violate the NBBO.

This is why I posed this question. If you can violate the NBBO by routing directly to ECN, what is preventing the Fidelities of the world from just positng bids/offer for size on the ECN's? In other words what makes the mkt particiapants still gravitate to the specialist when they can just use the ECN's like the INTC and MFST?
 
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