Observations on the NYSE specialist.

Quote from Don Bright:

The NYSE has been "electronic" for decades...and has NX for years...it's just a "single place" marketplace versus a "fragmented marketplace" - which allows for larger size and lower volatiility....Who would buy 50,000 shares "blindly" 1,000 shares at a time when they could "negotiate" a fair price...and everyone involved gets price improvement....this is the primary reason for a single place market. How could you negotiate a price and who would you negotiate it with? Traders do better with "predictability" than they do with "volatiility" - and tape reading allows for more predictability in my mind.

Just another point (no arrows needed in response, LOL).

Don
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how do institutions 'negotiate' their futures trade executions? if everyone adheres to the same rules, in a true single market center, it's clean, it's liquid, and it's cheap. most of all it doesn't discriminate between grandma and goldman. all of these attributes make a more liquid market.

it's not my fault there are parties out there moving several million dollars of stock at a clip. the visibility and access to that liquidity shouldn't belong to other institutions, it definitely shouldn't belong to SLK and Bright by extension, it should be accessible equally by the whole market, and not through a litany of esoteric new order types, hybrid makeovers and constantly changing rules
 
I think that most people here are relatively new to trading, and don't really know what happens in the market during a period of calamity. During the market crash in 1987 if you owned Nasdaq stocks, you were out of luck if you wanted to get out. Market makers simply pulled all bids, and refused to give quotes or pick up the phone in some cases. Granted, you were down if you owned NYSE stocks, but at least you could get out if you wanted to. Fast executions mean nothing, when your stock is tanking and all the market makers are pulling their bids.
 
Quote from reg:

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!
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The fact that you included Goldman in the list of "stocks that haven't moved to the Nasdaq" tells me that you know very little about the history of the NYSE and its commercial interests. You probably didn't even try to understand why I mentioned Microsoft, Intel and Cisco in the list of companies trading on the Nasdaq rather than NYSE. Reread Mr. Bright previous post about the NYSE providing liquidity for centuries to understand the sarcasm of my reply.
 
Quote from shneed:

I think that most people here are relatively new to trading, and don't really know what happens in the market during a period of calamity. During the market crash in 1987 if you owned Nasdaq stocks, you were out of luck if you wanted to get out. Market makers simply pulled all bids, and refused to give quotes or pick up the phone in some cases. Granted, you were down if you owned NYSE stocks, but at least you could get out if you wanted to. Fast executions mean nothing, when your stock is tanking and all the market makers are pulling their bids.
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i see where you're coming from.

that's fine, the exchange could designate market makers who are obliged to provide liquidity, and required to trade through the single market center (ala globex). Their compensation would manifest as a portion of the exchange fee, and the MMs are welcome to trade through that single market center however they wish in the process.

if the specialists aren't being rewarded beyond comms for making an orderly market, then what is everyone fighting so hard to preserve? the web of order types and rules are there to obfuscate the true market to the disadvantage of smaller and generally less informed participants, which might make a lot of people here smile, but it's not the purpose of an exchange. in the end it hurts access and liquidity
 
You can't make money in a pefect market. The markets you're trading in (NYSE, NAZ) are very inefficient. that's why you see prices fluctuate. a hoard of people bidding up the price or selling it off.


If we have a "perfect" stock market. You would be buying stock with barcode on it and know exactly what you would be paying, as with everyone else.



Quote from Babak:

Really? A perfect market is no market? Care to explain this? I thought a perfect, frictionless market is the orgasmic goal of capitalism.
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how would you explain the popularity of globex and the successful traders there

until every human brain on earth is directly connected and we control the weather, there will always be information inefficiencies
 
I'd like to shares an experience with the ge specialist. I'm on the bid with 5000 shares.

25000 shares cross my price by 2 cents on the book. I get filled 700 shares out of the 25000.

The rest get filled at the offer price. the shares on the offer price remain unchanged. The stock then proceed to go up five cents and I sell because I don't really care about the 700 shares. I assume that there was a floor trader or something that got preference, but it seems fishy and these coincidence happen far too often.

so I have my manager call the specialist and ask him why I wasn't filled and that I just wanted to know the reason so I can avoid things like this in the future.

He tell me that he doesn't have to explain why I wasn't printed because only 700 printed at that price.

OK fine.

So It sit back down at my desk and the futures start to rip hard, and I punch long 5000, and get all of it.

right after my print the nyse dot drops through the book 15 cents. I get a crossed market message on arca, and decide to take the specialist print.

I offer out he fills me and only me, 7 cents lower at which time the stock begins to rip up.

Funny how of you use the word coincidence so often with the nyse specialists. :)
 
Quote from Babak:
... It is not fair and as such, those who suffer from it agitate for it to change.
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I don't think that people who support for the change are strictly want for their advantage based on the following reasons.
1. The change will not be implemented immediately, may be for the future generation.
2. If the change were made, it's still not sure that the new rules will work for their advantage.
3. If one really think that electronic system will work for his advantage, one will trade on NASD that is available now and don't need to waste time asking for the change on NYSE.

They opt for the change because they wish a better market for the future. And with the lesson learned on NASD [as the one that shneed had mentioned about the weakness of an electronic system for a period of calamity], NYSE will build a better system for tomorrow.
 
Quote from 88888accountant:
I'd like to shares an experience with the ge specialist. I'm on the bid with 5000 shares.

25000 shares cross my price by 2 cents on the book. I get filled 700 shares out of the 25000.

The rest get filled at the offer price. the shares on the offer price remain unchanged.

OK, so are you saying the market was 33.60-65 50x100 and you're the 50x? You then see a 250x @ 33.58 offer show up on OpenBook? You get filled for 7x 33.60 and then 243x prints at 33.65:

33.60-33.65 50x100
7s33.60
243s33.65

If so, does it not make sense that someone standing in the pit, when he saw the same thing you did, bid 33.65 (or market) for 243x and got the fill, giving the seller a superior price? Could the same thing not have happened electronically, with a DOT buy order? When you only want to pay .60 and someone else wants to pay .65, it doesn't seem right for the seller to have to settle for 0.60, does it?

The stock then proceed to go up five cents

Possibly because that same buyer or someone else wanted more? What was the next print, and then what was the quote? Did he print the offer for its entire size and then move the market up, possibly displaying the buyer's remaining bid? Something like:

33.60-33.65 50x100
7s33.60
243s33.65
100s33.65
33.65-33.70 200x250
 
If so, does it not make sense that someone standing in the pit, when he saw the same thing you did, bid 33.65 (or market) for 243x and got the fill, giving the seller a superior price? Could the same thing not have happened electronically, with a DOT buy order? When you only want to pay .60 and someone else wants to pay .65, it doesn't seem right for the seller to have to settle for 0.60, does it?

Of course, like I already said: "I assume that there was a floor trader or something that got preference, but it seems fishy and these coincidences happen far too often."

What you said: When you only want to pay .60 and someone else wants to pay .65, it doesn't seem right for the seller to have to settle for 0.60, does it?

It doesn't seem right? Yes it does. It ABSOLUTELY DOES.

I'm showing my order.

They aren't.

Who the hell are they to come in out of turn and get a print before me and the guy on the offer. get in line on the level 2.
Shown orders should have preference over floor orders. PERIOD.

Anyway, this is part of the game that I already accepted and realize its not the way it is so I'll deal with it.

What upset me was the fact that the specialist didn't have to justify the print.

How do I know if its a floor order or not?

How do I know that he isn't the one taking the shares for himself?

Why wasn't there some sort of order number for that order given to me so I could check which company or floor trader got the fill?

If any one person can just constantly screw people and never have to explain why, then there is a problem with corruption and something should be done about it.
 
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