Observations on the NYSE specialist.
- Thread starter oliver777
- Start date
How long had you been trading NYSE before switching to the Naz?
Quote from oliver777:
This thread was started as an observation of actual events drawn from observation (this is not a bitch session or an anti-specialist rant), just an observation.
So far, so good. But here's where the wheels come off the wagon:
... and if the specialist is responsible for unfair practices on stocks that trade on the NYSE...
With no explanation tying the spec to any of the things you mention, and apparently no attempt to understand any of the other explanations offered.
Ford might be a bad example because it is extremely thick, as are the 30 dow stocks
But that's the type of stock you compare them to on Naz. If you want to talk about X, compare it to thinner Naz stocks (and in general with 50%-80% of the volume because of the nature of a dealer vs. auction market, and the lack of larger players).
disappearance of size on the open book, flashing huge size on the bid or ask and miraculously disappearing. To me this seems blatantly deceptive and I'm not sure why anyone accepts this as fair.
But the spec almost certainly has nothing to do with these things. Orders that you see in Open Book arrive via DOT, the electronic order interface to the NYSE, from institutions and trading firms. They are NOT put there by the spec. Others have explained what their strategies might be.
Also, this sort of thing happens continuously in Naz stocks. Don't you see all the constant, pain-in-the-ass, sub-second jockeying around by the ECNs?
Back to NYSE... Sometimes, when there is no floor interest, or someone has just hit the bid or the offer, the next bid or offer displayed will come directly from the book if the spec doesn't want to quote it (yet).
So, 1000 offered at 50.25.
Someone NXs the offer.
1000 prints at 50.25. The best offer in the book is 13000 at 50.26. The NYSE quoted offer immediately updates to 13000 @ 50.26.
Now the guy that initiated that (13000@.26) order decides to cancel it. If he's not in the process of arranging a trade of that stock, the spec allows the cancel and may either let the offer show the next price level up from the book, or may show an offer at .26 from the floor, his own deck or prop account, or may show a 1x offer for the moment if he knows there is still stock available somewhere at .26.
Alternatively, you may see that 13000 @ .26 for a moment and then 100 @ .30. This probably means that buy orders marketable to .30 (at least) have shown up, and you'll probably see a print of at least 13000 somewhere between .26 and .30, or even higher if more buy orders pile on. You'll see this happen when that 0.25 print was an uptick and also a logical buy stop point.
This is all perfectly rational market behavior, and there's nothing unfair about it. Expecting the spec to always step in front of a moving train is naive. MMs aren't any more likely to do so in a similar situation.
This thread was started as an observation of actual events drawn from observation (this is not a bitch session or an anti-specialist rant), just an observation.
So far, so good. But here's where the wheels come off the wagon:
... and if the specialist is responsible for unfair practices on stocks that trade on the NYSE...
With no explanation tying the spec to any of the things you mention, and apparently no attempt to understand any of the other explanations offered.
Ford might be a bad example because it is extremely thick, as are the 30 dow stocks
But that's the type of stock you compare them to on Naz. If you want to talk about X, compare it to thinner Naz stocks (and in general with 50%-80% of the volume because of the nature of a dealer vs. auction market, and the lack of larger players).
disappearance of size on the open book, flashing huge size on the bid or ask and miraculously disappearing. To me this seems blatantly deceptive and I'm not sure why anyone accepts this as fair.
But the spec almost certainly has nothing to do with these things. Orders that you see in Open Book arrive via DOT, the electronic order interface to the NYSE, from institutions and trading firms. They are NOT put there by the spec. Others have explained what their strategies might be.
Also, this sort of thing happens continuously in Naz stocks. Don't you see all the constant, pain-in-the-ass, sub-second jockeying around by the ECNs?
Back to NYSE... Sometimes, when there is no floor interest, or someone has just hit the bid or the offer, the next bid or offer displayed will come directly from the book if the spec doesn't want to quote it (yet).
So, 1000 offered at 50.25.
Someone NXs the offer.
1000 prints at 50.25. The best offer in the book is 13000 at 50.26. The NYSE quoted offer immediately updates to 13000 @ 50.26.
Now the guy that initiated that (13000@.26) order decides to cancel it. If he's not in the process of arranging a trade of that stock, the spec allows the cancel and may either let the offer show the next price level up from the book, or may show an offer at .26 from the floor, his own deck or prop account, or may show a 1x offer for the moment if he knows there is still stock available somewhere at .26.
Alternatively, you may see that 13000 @ .26 for a moment and then 100 @ .30. This probably means that buy orders marketable to .30 (at least) have shown up, and you'll probably see a print of at least 13000 somewhere between .26 and .30, or even higher if more buy orders pile on. You'll see this happen when that 0.25 print was an uptick and also a logical buy stop point.
This is all perfectly rational market behavior, and there's nothing unfair about it. Expecting the spec to always step in front of a moving train is naive. MMs aren't any more likely to do so in a similar situation.
I trade nyse and nasdaq
Makes no difference really as long as both are liquid,
you can punch big size through both.
If they have low liqudity
You'll get slapped by nasdaq
You'll get bitch slapped by nyse
Pros and cons of both exchanges.
As long as the issue is liquid, there are no issues at all.
Makes no difference really as long as both are liquid,
you can punch big size through both.
If they have low liqudity
You'll get slapped by nasdaq
You'll get bitch slapped by nyse
Pros and cons of both exchanges.
As long as the issue is liquid, there are no issues at all.
Once again, let me explain this: The Specialist cannot initiate an uptick, cannot initiate a downtick, cannot take a large percentage of any order, no "ifs, ands, or but's" - Perhaps when the stock starts to rip, 100 or so Bright traders decide to cancel their orders, etc. Remember, we cancel 5 times the orders we get than we execute (or more).
Program trading accounts for well over half of all the trading on the NYSE, and the "if-then" format for all of this trading causes thousands of orders to be entered anc cancelled every hour.
Sometimes it's the "boogie man" - sometimes it's just market conditions....trade the same stocks every day, learn them well, learn how the Specialist handles things...sometimes a "bad" Specialist will make you the most money.
All the best,
Don
he'd be even worse if he had to trade for a living
Good, honest response!
Don
Perhaps your platform sucks. I use Hammer/Anvil and am probably hitting out before you. Sorry to sound obnoxious, but it's true - the platform you use does matter.
I once spoke to Don Bright on the phone and he told me the only thing a platform needs to do is "Buy, Sell, Canel" as a justification for using Redi+. That's all I needed to hear to end the call right then and there. Good luck getting filled if you're the last guy hitting out.