Observations on the NYSE specialist.

[Hydroblunt]

Quote from Mike805:

Finally, a reasonable comment. Thanks ang_99.

If you don't like the way the exchange conducts its business - STOP DOING business with them, i.e. trade something else.

Think about it this way, via a simple act of not "buying" their product, you will force them to become more competitive.

Mike

The key sectors trade on NYSE, so if you want to play part of them, you have to deal with the specialist. However, stocks like X, NUE, LEN, DHI, etc. are dominated by traders & baskets with the specialist pretty much just resorting to pathetic daytrader pinching & spread scalping. ECNs are quite active in those stocks and the action is mostly electronic. Tapereading those stocks is unnecessary, so the specialist is really nothing more than a nuisance and won't be missed at all. ECN use only grows in those stocks and pretty much sets the tone of what NYSE is going to be.

Specialists are a dying breed so they are gonna squeeze the daytraders for everything they can. The institutions took a serious stand over the last few years so the specialists had to lay off them and go for the only prey left, the daytraders. They have no lobbying power, are unorganized and are already viewed as the black sheep so it's a no brainer to screw them as much as possible. Picking up the last of the crumbs, in other words.

 

[moneymktmike]

I agree

 

[Don Bright]

Quote from jimrockford:

I enjoyed your post, Babak, and I regret only that I could not express myself as poetically as you.

Don defends the NYSE system of parasitic corruption because he financially benefits from it. His defense is based on all sorts of untrue information. First, he incorrectly claimed that I was getting bad fill prices because my broker, Interactive Brokers, was taking the other side of my trades and then reporting them as NYSE executions. Untrue. Second, he incorrectly claimed that I got bad prices because IB sells equity order flow, and that he confirmed this by reading IB's customer account agreement. IB doesn't sell equity order flow, and the IB agreement doesn't say that IB sells equity order flow. Third, he incorrectly claimed that I got bad prices because IB matched my orders against those of other IB customers. Wrong again. Fourth, he incorrectly suggested that my executions were inferior because IB, unlike Bright Trading, fails to provide access to the Goldman Sachs pool of liquidity for NYSE-traded issues. The truth is that IB does provide such access, through Nasdaq's SuperIntermarket facility (displayed as Supersoes on the IB platform), not only to the Goldman Sachs pool, but also to all the similar pools operated by all the other Nasdaq market-makers as well. Wrong, wrong, wrong, wrong, Don.

The icing on the cake was Don's amazing claim that:



This can't possibly be reconciled with the regulatory and law enforcement history of specialist cheating and stealing, for example, as documented in the Washington Post article I posted earlier in this thread.

http://www.washingtonpost.com/wp-dyn/articles/A46486-2005Apr12.html

Perhaps the greatest scam of all is the NYSE's continued use of manual execution, in such a way as to enable cheating and stealing at a level impossible to sustain were NYSE to deploy modern technology.

Well, since you have decided to point out my "errors" I would like to invite you to an online chat session to discuss in detail your comments.

1. If you think about it, what difference does it make to Bright Trading what type of execution you use...we make money no matter what, right?

We do better when our traders make money, stay with us for a lifetime, and continue to prosper, make sense to you? That is the only reason for our trading about 90/10 NYSE at this point in time. Openings still account for about 25% of all BTraders profits, and the blue chips make for great pairs trading.

2. I didn't say IB "does" trade against you, simply that retail brokers can (and many do). I respect Timber Hill and IB, and they are the only retail firm I have ever recommended to retail traders.

3. Please provide documentation that IB can smart route to GS private liquidity pool, that would be something I would really be surprised to see if it is true. Especially since this is brand new even for us.

You keep using the words "cheat" and "steal" - now, one must ask, why do you think the financial world would participate in this den of inequity? It's a market place that has provided liquidity for centuries, nothing more, nothing less.

You realize, of course, that our traders can use any technology available....and it really doesn't matter since their "edge" is the ability to take part in strategies that most traders cannot...those that are "capital intensive" - (again, openings, pairs, M&A, etc.). Their success has little or nothing to do with how the orders are executed...if we run across a "bad" specialist, we simply change stocks (very rare, but it does happen).

I really don't see any reason for all the hostility, we all just want to "play the game" and make some money and, as in all business ventures, take responsibility for' our own actions (especially necessary in the trading business).

So, if you want to hash it out on a public forum, I'm glad to...and who knows, perhaps others could learn from an adult discussion about such matters...... perhaps Baron could put it together....if not, no big deal, I'm not trying to "win" the argument.....simply to discuss how we feel about things....

All the best,

Don

 

[ilganzo]

Quote from Don Bright:

You keep using the words "cheat" and "steal" - now, one must ask, why do you think the financial world would participate in this den of inequity?

Why do you think companies like Cisco, Intel and Microsoft haven't moved to the NYSE?

Seriously, this thread could go on forever until the members of the NYSE Special Defense Team will keep replying with out of the subject posts: the original posts were intended to document the kind of activity that goes on at the NYSE and inform new traders of what they're dealing with. This has nothing to do with inefficiencies, making money or other generalizations.

 

[Hamlet]

Mr. Rockford uses as the basis of his contention (that the specs are crooks) the fact that over a year ago his 100 share order of SPY was was not filled as efficiently as it would have been had he routed it to an ecn. Mr. Rockford also contends that the NYSE "baits" traders into routing SPY orders to it buy showing the best bid/offer where the trade is ultimately not filled. Any trader with any experience can see why Mr Rockford's assumptions and accusations are wrong (as well as his actions being plain stupid). Also, when Don asked Mr. Rockford for the t&s and order history so that those orders could be investigated, Mr. Rockford could not produce any.

What is needed here is not a discussion but an EDUCATION - Mr. Rockford's.

 

[Hydroblunt]

Quote from Don Bright:


You keep using the words "cheat" and "steal" - now, one must ask, why do you think the financial world would participate in this den of inequity? It's a market place that has provided liquidity for centuries, nothing more, nothing less.

Haha thats very funny. That's like saying the top IBs are goody two shoes tbat only look after their clients interests.

 

[Avid_Consumer]

Quote from Hamlet:

Mr. Rockford also contends that the NYSE "baits" traders into routing SPY orders to it buy showing the best bid/offer where the trade is ultimately not filled. Any trader with any experience can see why Mr Rockford's assumptions and accusations are wrong

lol hamlet, you're ridiculous. you must be sitting right next to don

indulge me since i'm new to the equity field, and substantiate your assertion. that sounds like what's been happening here, as recently as today in a symbol that trades about once every 3-5 minutes (and far far less than that on nyse), i'll send an order to hit his nbbo bid, and 2-5 seconds after he receives me, he prints at that level and moves it down without filling. initially it would happen without any print, then i started leaving my orders active and calling them in. since then it still happens, albeit with a print.

in and of itself this wouldn't be suspect, except for the regularity with which it happens on such a truly inactive symbol, and always within 2-5 secs (and always >= size) of my order but never by much. why does it always print moments after i send.... just once i'd love to see the print in the 2-3 secs before i send

i can usually get filled near his original bid on arca if i'm in the mood to spend 10 mins on the fill and the mkt leans against the signal, though they add up

if this were you, would you assume there was someone else out there trading your exact strategy, and somehow always beating you to the mark no matter when you transmitted within a few mins of your signal on something utterly thin? these aren't particularly obvious trades, nor are they sent at an exact time

please make a constructive contribution and share some of the experience you keep alluding to. to me this looks like some form of frontrunning, but maybe there's a logical explanation besides statistically significant bad luck

 

[jimrockford]

The special NYSE defense team, and particularly Hamlet, are harassing me by making false statements about me in this thread. Some of these have included false claims that I made various statements which I did not actually make. I demand that this behaviour cease and desist at once. I request anybody who wants to know what I said to read my own postings, instead of those postings from scoundrels purporting to describe my statements. I'd also like to thank people like Avid Consumer and oliver777 who objected to this harassment or who found value in the material I posted.

 

[reg]

Quote from ilganzo:

Why do you think companies like Cisco, Intel and Microsoft haven't moved to the NYSE?

This must be the most asinine post on this thread. Following your line of argument, why do you think companies like IBM, Exxon, Bank of America, Goldman Sachs, Home Depot, Walmart, etc. haven't moved to the Nasdaq?
LMAO!

 

[reg]

Quote from jimrockford:

The special NYSE defense team, and particularly Hamlet, are harassing me by making false statements about me in this thread. Some of these have included false claims that I made various statements which I did not actually make. I demand that this behaviour cease and desist at once. I request anybody who wants to know what I said to read my own postings, instead of those postings from scoundrels purporting to describe my statements. I'd also like to thank people like Avid Consumer and oliver777 who objected to this harassment or who found value in the material I posted.

You truly are a crybaby. First, it was bitching about IB's order execution, then on to the NYSE specialists, and now it's about accusing your fellow ET posters of "harassment" and "making false statements." While others are busy trying to develop an edge and making money trading, you sit there crying about how everyone is trying to screw you over.
No offense, but you truly need to change this nitpicking, whiney attitude of yours and start acting like a grownup.
I hope the above statement does not fall under your definition of "harassment".