NYSE's Electronic Proposal

[Avalanche]

Quote from B1010:

10 second delay i believe

its on a 5 sec delay (recently changed).

 

[I Missed Boat]

Quote from MACD_addy:

How much is the Open Book actually delayed?

I trade 99% of the time on the Naz because of issues just like the ones mentioned here. I'm just not comfortable with the control the specialist has over the stock. If I see a posted price I want to be able to hit it ( or at least have a chance), and there just doesn't seem to be enough ECN liquidity on most stocks. I find the spreads get pretty scary at times too.

In all fairness, the MMs play worse games on NAZ and get away with more. Studies also show that people get better prices on the NYSE. Plus, it is good to have one person accountable for the rules, liquidity and stability of each stock (which is one reason why MMs can get away with much more on the NAZ, even though many MMs have been cited for major violations in the past). The only issue for the NYSE is that they should enforce existing rules.

 

[hayman]

"Price Improvement" is the biggest scam going on the NYSE. It's a zero sum game - for every trader helped by it, it hurts another. It disrupts the natural laws of supply and demand, and can be capriciously used by the Specialist at his/her whim, to help manipulate the market. Without question, it is the most misused and blatantly obvious poor rule that the NYSE permits. To me, that is the 1st order of biz to rectify. # 2 is the 30-sec rule, and # 3 is the (now) 5-sec Open Book delay.

Fix these 3 blatant abuse rules, and we might be able to call this exchange "fair".

 

[B1010]

hayman I agree 100%.

 

[goodscalp]

In addition to the above mentioned abusive rules fee
the over 5 minute - specialist gets a commission is a abuse
(afterall there is no such rule on the NASDAQ)

 

[B1010]

Just curious how does the 5 minute rule actually work?

 

[goodscalp]

The way the rule works is that if an order is filled after five
minutes have elapsed an addtional surcharge is charged to
the trader usually 10.00 per thousand or a penny a share.
This surcharge basically goes to the specialist. Fair? No.

 

[Merlin]

Quote from ssternlight:

I watched some NYSE stock during a meltdown a few years back. The ECN's were front running the specialist something fierce and there was nothing he could do about it. Eventually, he just pulled the plug and stopped the trading in that security for a while.

If they actually implement this proposal I think the specialists would get creamed -- so I would expect some trick to maintain the status quo.

Alot of those ECN's crossing down are the specialist themselves. A former compliance officer actually had to contact the exchange to find out if the specialist were able to execute orders from the floor. It took 7 months to get the reply but the answer was yes. In some of the thinner stocks I believe the specialist cross themselves to get some action, of course they never fill the cross.

 

[Merlin]

Quote from I Missed Boat:

In all fairness, the MMs play worse games on NAZ and get away with more. Studies also show that people get better prices on the NYSE. Plus, it is good to have one person accountable for the rules, liquidity and stability of each stock (which is one reason why MMs can get away with much more on the NAZ, even though many MMs have been cited for major violations in the past). The only issue for the NYSE is that they should enforce existing rules.

I agree 100%, at least when you get screwed you know who it was and who is accountable.
Does anyone have a complete NYSE rule book or bylaws, I ordered one a few years ago and it was missing all the order handling rules, those are for "Members only" I was told.

 

[cashonly]

Quote from Merlin:

I agree 100%, at least when you get screwed you know who it was and who is accountable.
Does anyone have a complete NYSE rule book or bylaws, I ordered one a few years ago and it was missing all the order handling rules, those are for "Members only" I was told.

I have one and after getting wacked 60 cents in one tick a few times, looked for a clear and concise definition of what constitutes a "fair and orderly" market. All their terms seem quite ambiguous... either that, or I need to take a break from trading to get a law degree.