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Observations on the NYSE specialist.
- Thread starter oliver777
- Start date
Quote from jimrockford:
I believe two different scenarios are consistent with what we learned, or should have learned, from cstu.
#1. A floor broker stepped in front of the book on the basis of size priority overriding time priority, so that Dan stopped getting executed and the floor broker took over.
OR
#2. A number of floor brokers asserted parity with the book, without regard to either time priority or size priority, so that Dan and each one of the floor brokers got equal shares of the available liquidity.
Impossible as per Rockford's appointed "expert":
Quote from cstu:
Jim
"the ony selling interest which could have jumped ahead of Dan's short sell order would have been a newer floor brokers offers at the same price"
Not entirely correct. ............ this order can "large order" can never jump ahead on the specialist book. Also the best the larger order can do is trade on parity (after parity is acheived) by virtue of a match.
The only way this order can ever sell more than the specialist book or any other broker on parity is if the seller gets there own buy order that is greater than the total of all other offers. He can then cross his stock and shutout everyone.
Therefore, according to Rockford's own expert, (and who he says is the "only expert on this board"), Rockford is dead wrong, and is, as CTSU says, simply not willing to listen (he certainly isnt since I have been telling him the same thing for 30 pages!).
Professor Blume wrote:
And cstu said, of Blume's explanation,
The NYSE was founded in 1792 and first functioned as an open outcry market. In addition to the
basic features of these markets described in the last section, the NYSEâs procedures also
embodied the following principles.
Price priority.
***
Time priority
First-come, first-served is a time-honored principle that rewards prompt action. In the
present case, the first member to bid or offer at a price gets the first trade at that price.
Beyond that, there is no time priority. In a crowd, itâs possible to keep track of who was
first. Itâs more difficult to keep track of who was second, third, etc.
After the first trade at a price, all members bidding or offering at that price are said to be
at parity. This means that they have equal claim to all counterparty interest at that price
Size precedence
This is a secondary priority rule. Normally, if A and B are both bidding $100 and are at
parity, they will share arriving sellers equally. If an order to sell 300 shares at the price
arrives, A and B will each buy 150 shares, or they might flip a coin for the whole amount.
But if A is bidding for 300 shares and B is bidding for 100 shares, A would get the full
amount based on size precedence. Size precedence is rarely invoked nowadays.
***
The limit order book
The book is maintained by the specialist. When there were multiple specialists, each specialist
could have his own limit order book. Now there is a single electronic book.
In acting as agent for limit order book, the specialist in a sense becomes the book, representing it
as if it were a single floor trader. An important implication of this is that although price/time
priority is strictly observed within the book, the book as a single entity might be at parity with
floor traders that arrived considerably after the limit orders in the book were posted.
And cstu said, of Blume's explanation,
your last snippet is pretty good and telling.
All readers please be advised that Hamlet has engaged in a longstanding pattern of harassing me by making false statements about me, and by falsely claiming that I made statements which I did not make, or by falsely altering my statements in order to change them into statements I did not make. He has, for example, continued to attribute some of the same false statements to me, even after I have already denied making them. I don't want to waste any more time going into specific denials of each specific statement he falsely attributes to me, so I will just post this general warning that all should disregard Hamlet's false descriptions of my statements.
It is such a shame that the ranting and raving in this thread seems to have driven away most worthwhile participation.
Quote from jimrockford:
All readers please be advised that Hamlet has engaged in a longstanding pattern of harassing me by making false statements about me, and by falsely claiming that I made statements which I did not make, or by falsely altering my statements in order to change them into statements I did not make. He has, for example, continued to attribute some of the same false statements to me, even after I have already denied making them. I don't want to waste any more time going into specific denials of each specific statement he falsely attributes to me, so I will just post this general warning that all should disregard Hamlet's false descriptions of my statements.
I welcome any and all opportunities to answer these baseless charges.
Note that Rockford makes only generalized accusations because he knows that I can and will debunk any specific accusation he has since everything is well documented here.
It is clear to anyone reading this thread that Rockford has repeatedly been wrong in his assertions which has been proven by the very expert he touts, and systematically tries to obfuscate that by this type of childish behavior and brute force tactics. Every time he is proven WRONG he cries harassment.
OK once again, to many complaints...lines drawn...anything after this point off topic is not tolerated. I don't want to hear rationalization, or he started it comments. If its off topic don't post it. If you can't do that go to chit chat...cause if you stay in a forum I moderate and go to far..I have (NO) problem banning to restore some order. I'm cracking down so others can post in peace, and add value to discussions....Thanks for your time.
- ChaosNSX
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- ChaosNSX
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Quote from ChaosNSX:
OK once again, to many complaints...lines drawn...anything after this point off topic is not tolerated. I don't want to hear rationalization, or he started it comments. If its off topic don't post it. If you can't do that go to chit chat...cause if you stay in a forum I moderate and go to far..I have (NO) problem banning to restore some order. I'm cracking down so others can post in peace, and add value to discussions....Thanks for your time.
- ChaosNSX
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Thank you, ChaosNSX.
May I suggest that you give a definition of the term "off-topic"? I think it means many things to many people, and since you are the moderator, we need to go by your definition. I think if you give a good definition, then everybody will have an easier time obeying your instructions, and you will have an easier time moderating, because people are far less likely to step over a line drawn so clearly that even an idiot can see exactly where it lies.
Agreed lets define it.
OFF-TOPIC...
This definiton will contain 2 key parts to its identification.
1. The post violates any of the Code of Conduct
http://www.elitetrader.com/conduct_rules.cfm
2. Does not have a central theme, or observation that does not directly link back to the essense of the original thread title.
These are the two criteria that base my definition for off topic.
Feel free to disiminate and quote this post to other users so they are aware this has been defined and should be practiced.
OFF-TOPIC...
This definiton will contain 2 key parts to its identification.
1. The post violates any of the Code of Conduct
http://www.elitetrader.com/conduct_rules.cfm
2. Does not have a central theme, or observation that does not directly link back to the essense of the original thread title.
These are the two criteria that base my definition for off topic.
Feel free to disiminate and quote this post to other users so they are aware this has been defined and should be practiced.
Quote from jimrockford:
Thank you, ChaosNSX.
May I suggest that you give a definition of the term "off-topic"? I think it means many things to many people, and since you are the moderator, we need to go by your definition. I think if you give a good definition, then everybody will have an easier time obeying your instructions, and you will have an easier time moderating, because people are far less likely to step over a line drawn so clearly that even an idiot can see exactly where it lies.