Observations on the NYSE specialist.

[reg]

Quote from ilganzo:

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.

I was about to reply to your post above with regards to the history of the NYSE and its commercial interests until I read your self-description in the profile section of ET and in one of your recent posts as a "struggling trader" with one year's experience.
When I was a struggling trader in my first year, I had a tendency to keep my mouth shut and pay attention to posters on ET such as Don Bright (except for the instances when he was hyping his firm) and the others before me since I realized that they knew more than me and that I can learn from them and not the other way around.
A lot of the people whining about the NYSE specialists on this thread are newbies who do not know what they are talking about. Fast executions and unpredictable volatility means nothing if you cannot minimize your risks and make consistent and large enough profits to make a living trading.
Before one starts talking about the history of the NYSE and its commercial interests and how corrupt the specialists are and starts arguing and using sarcasm with other more experienced , more knowledgeable posters on ET, it would probably be a good idea for him/her to ask first : how much am I up for the year?

 

[jimrockford]

One of the very many lies told on this thread, by the Special NYSE Defense Team, is that any trader who criticizes the NYSE does so because he seeks somebody to blame for his own difficulties in trading. These liars have repeatedly directed such comments at me.

The real truth is that my trading totally avoids the specialist and the various obstacles, costs and risks they create for traders. This makes it impossible for me to benefit or to suffer as a result of specialist corruption or inefficiency. My trading has absolutely no relevance whatsoever to the topic of this thread ("Observations on the NYSE Specialist"). I have no financial interest in criticizing or defending the specialist system. I have no dog in this race.

This makes me different from the NYSE Special Defense Team, which does have a financial interest in defending NYSE. I speak as a disinterested, impartial observer, trying to help other and newer traders, instead of trying to help myself. I also suspect that some members of the Team are not even traders at all, but defend NYSE because they are the type of anti-social, sadistic freaks readily found in unrestricted internet discussions, and who enjoy hurting others for sport.

It seems that these crude, childish, and vicious people tend to reduce all intellectual debate down to a very simple comparison of one quantity to another quantity. They are basically arguing "My trading is better than yours", but their unconscious subtext is really "My penis is bigger than yours." These people never developed emotionally very far beyond that stage in early childhood, where little boys first discover what makes them different from little girls, and then experience that first burst of pride in their masculine identities. It is only natural for them to want to make comparisons. Their stunted development leaves them a long way to go before they will learn, if they ever do, that we all have something to offer each other, in the wonderful marketplace of ideas, and that neither ideas, nor people, can be measured uni-dimensionally (that is, by comparing one scalar quantity to another, in search of an answer to that recurring question, always uppermost in their minds: "Which one is bigger?").

I have repeatedly stated, in this thread, that my trading steers clear of specialists. I have repeatedly explained that as a result, my trading is absolutely irrelevant to this thread. Yet the NYSE Special Defense Team continues to ignore these facts, and continues to assert that I am blaming NYSE for my trading problems. This is how I know, for a certain fact, that these people are absolutely 100% liars.

I don't think this posting would be complete without naming names of those who have proven themselves just as dishonest as the bogus quotes published by their beloved specialists. They are:

Hamlet,
reg, and
stock777.

 

[reg]

Quote from jimrockford:

One of the very many lies told on this thread, by the Special NYSE Defense Team, is that any trader who criticizes the NYSE does so because he seeks somebody to blame for his own difficulties in trading. These liars have repeatedly directed such comments at me.

The real truth is that my trading totally avoids the specialist and the various obstacles, costs and risks they create for traders. This makes it impossible for me to benefit or to suffer as a result of specialist corruption or inefficiency. My trading has absolutely no relevance whatsoever to the topic of this thread ("Observations on the NYSE Specialist"). I have no financial interest in criticizing or defending the specialist system. I have no dog in this race.

This makes me different from the NYSE Special Defense Team, which does have a financial interest in defending NYSE. I speak as a disinterested, impartial observer, trying to help other and newer traders, instead of trying to help myself. I also suspect that some members of the Team are not even traders at all, but defend NYSE because they are the type of anti-social, sadistic freaks readily found in unrestricted internet discussions, and who enjoy hurting others for sport.

It seems that these crude, childish, and vicious people tend to reduce all intellectual debate down to a very simple comparison of one quantity to another quantity. They are basically arguing "My trading is better than yours", but their unconscious subtext is really "My penis is bigger than yours." These people never developed emotionally very far beyond that stage in early childhood, where little boys first discover what makes them different from little girls, and then experience that first burst of pride in their masculine identities. It is only natural for them to want to make comparisons. Their stunted development leaves them a long way to go before they will learn, if they ever do, that we all have something to offer each other, in the wonderful marketplace of ideas, and that ideas cannot be measured uni-dimensionally (that is, by comparing one scalar quantity to another, in search of an answer to that recurring question, always uppermost in their minds: "Which one is bigger?").

I have repeatedly stated, in this thread, that my trading steers clear of specialists. I have repeatedly explained that as a result, my trading is absolutely irrelevant to this thread. Yet the NYSE Special Defense Team continues to ignore these facts, and continues to assert that I am blaming NYSE for my trading problems. This is how I know, for a certain fact, that these people are absolutely 100% liars.

I don't think this posting would be completely without a list of these people, who have proven themselves just as dishonest as the bogus quotes published by their beloved specialists. They are:

Hamlet,
reg, and
stock777.

You are truly starting to lose it. You either forgot to take your medication or skipped your weekly session with your shrink.
I hope you calm down and feel better tomorrow.

 

[bitrend]

Quote from reg:
You are truly starting [...] with [...].

Please remember that the purpose of this site is for sharing knowledge and a possible knowledge transfer, its title is Elite Trader. New traders may like to learn good trading experiences from you guys, not something like the above.

Best regards.

 

[Babak]

I just happened upon this and thought it may be illuminating to our conversation here:


Interview with founder of Carlin, Ron Shear.

Ashton: What are your thoughts on the merger between the NYSE and Archipelago, what effect do you feel the merger will have on the exchanges, even the open outcry pits in Chicago?

Ron: I think the individual members of the exchanges, like the NYSE, are delusionary if they think all the roles are going to continue. With the systems such as the ones we built, we can execute better on the NASDAQ than on NYSE because there is more clarity of information, which does not exist on the NYSE right now. To have our systems interact with intricate orders economically for our clients is what we would like to achieve. The more electronic the market, the better we can achieve that for our client.

Ashton: So you feel it is going to be more like Europe where they went form open outcry to all electronic training?

Ron: Right, I think that is the trend of the United States.

 

[sdtrader]

Quote from lescor:

I think most nyse traders don't defend it because it's better. They like it because they know how the system works and they work with it to make money.

Exactly Lescor. I am dreading the day things change. I LOVE the specialist system.

 

[Hamlet]

Quote from jimrockford:
If I can consistently get far better SPY prices by routing to ECNs, does this not indicate that something is fundamentally broken, wrong, and corrupt with routine NYSE trading?

You are correct that I would sometimes get price improvement from NYSE on SPY, but price improvements were far outweighed by the extremely poor execution prices I would receive on other trades. I make this statement by using the immediately executable prices available on ECNs as my benchmark.

Now you claim that you do not even trade on NYSE. That is not something a reader would conclude from your posts such as this one. Who is the dishonest one?

The answer to your question in the first line is no, and the fact that you draw that conclusion exposes your flawed logic.


Mr. Rockford, If I had as much free time as you seem to have to come to this message board whining about the NYSE (which you now say you do not even trade!!!), as well as whining about other posters who it seems have hurt your tender feelings, I would probably have faulty thinking too (and you've already heard my advice on that regard).

 

[Hamlet]

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.

Don, the hostility is understandable since for many, many years the specialist system has been one through which a number of people enrich themselves due to their position of power and authority. It is not fair and as such, those who suffer from it agitate for it to change.

Those, like yourself, who gain from it, of course wish for the status quo to continue. That is understandable.

Every profitable short-term trade is born from an inefficiency or luck.
I think that is what Don meant.

I do not think that anyone here is part of that inner circle position of power that you speak of. The emotional hostility is coming out of newbie traders and pikers making false claims and accusations and the more experienced traders who are trying to correct their misguided remarks.

 

[Hydroblunt]

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.

Ironically, in Richard Ney's book he mentions several occasions from 1970s where NYSE simply refused to fill market orders in any timely manner, halted stocks and just gapped the hell out of them the next day. Look if the market is tanking, you can't blame market psychology and I really doubt whatever little benefit NYSE provided on that day even comes close to outweighing what they have stolen over centuries. Plus, the Nasdaq of 1987 was quite different from today, there were several regulations passed because of that day. Market Makers, in general, are heavily regulated now because of the abusive power they had which was on many levels equal to what the NYSE specialists can do. Now that most of this fast intraday action is dominated by computers, whatever happens during these extreme cases is just market action. NYSE stock can and have simply gapped down points at the whim of the specialist upon a market order, without any ECNs in the middle, there is ZERO liquidity whatsoever.
It was documented in the recent years that the specialist only truly provides liquidity at the tops and bottoms, in other words, when it is obviously profitable to him. There is a very interesting article you can find through a yahoo or google search where during the mid-1990s the IBM guy tried to claim greatness and honorability when the company stock was gapping down over 10% due to missed earnings. He took in smth like half a mil shares of a 2 mil opening print (dont quote me on the numbers). He was up several points in a half hour. Lot of ppl & institutions were pissed since the gap down was obviously overexaggerated so that the NYSE scum could make a couple easy mil. I think any of us would love to provide liquidity like that, thats why NYSE traders read the tape to catch these manipulations and get on the specialist's side. The institutions have really taken a stand against NYSE abuses over the last few years, the pennying did not go over too well with the smaller funds as they have been filed complaints en masse. It's over, the big boy banks want the racket for themselves, Goldman Sachs will make much more money through their algo progs & spreaders than through Kellogg, Spear & Leeds.
This is information that has been known and even documented since 1960s. The NYSE was set up as one big racket where the insiders are controlling and manipulating prices to scam the investing public and the little guys. For christ's sake, some of these guys are still Staten Island hoodlums with barely a high school education that were privilieged enough to be born in the right family. That's what specialist firms are, families that happened to hold control of their racket at the Big Board. How many more clues does a person need to understand what really holds the NYSE together and makes it tick? If its system is so great why is no other exchange in the world even bothering to consider emulating it? It's laughable to some people, some a$$hole in the middle with ridiculous order execution control, exclusive order flow info and the right to trade proprietary. The conflict of interest is obvious to anyone with half a brain.

 

[reg]

Quote from bitrend:

Please remember that the purpose of this site is for sharing knowledge and a possible knowledge transfer, its title is Elite Trader. New traders may like to learn good trading experiences from you guys, not something like the above.

Best regards.

I agree, and that is why I think that jimrockford went over the line by labelling his fellow posters on this thread as "anti-social, sadistic freaks", "liars", "crude, childish, and vicious people", and people who argue that ""my penis is bigger than yours."
Now, does this sound to you like someone who is eager to learn and share knowledge?
By the nature of his responses to criticism on this thread, jimrockford's credibility has been shred to pieces and people, especially newer traders, can hopefully ignore his future posts which only reeks of his egotism.
Best regards and profitable trading.