Prop Trading nasdaq stocks

Originally posted by Vinny1
RTharp, you mention that a specialist will fill your buy order .70 less when he gaps it down that much, you also have to remember that in this situation the seller will also receive .70 less on the NYSE all at one price. If it was Nasdaq, the seller would have the opportunity to hit bids at higher prices before it traded immediately down .70 cents.In addition, I feel that trading Nasdaq is more advantageous than NYSE for the following reasons:
1)ability to follow and trade with the market maker who is the axe
2)faster fills
3)more volatility,hence more profit opportunity
4)Level 2 allowing you to see more than just the inside prices
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I'm not disagreeing with you it is very possible to trade Nasdaq stocks and make a profit. I know quite a # of traders who do.

First though there are instant fills on the NYSE with NYSE+. I can always hit the bid/offer and get executed immeadiately to buy the offer/ or sell bid for up to 1099 shares.

I'd rather follow though the tape and follow one guy than follow an AXE who tends to try to hide himself.

There is volatility in NYSE too. Higher prices equal higher volatility. Traded IBM lately?

Level2 sometimes isn't very true. Most market makers put reserve orders out. So 1000 shares is really 100,000 shares.


The scene I was talking about doesn't happen on NASDAQ. Take a look at prints that are .50 away from the bid/ask with size. That was a huge block trade. Market makers will also take huge trades but very few will do it on the inside bid/ask. I'm not talking about 5000 shares . I'm referrring to 200,000 shares plus. I see it all the time on the NASDAQ market too when a fund needs to get out in a hurry they will get executed but away from theinside bid /ask. On NASDAQ a trader can't participate in that. On the NYSE I can.

Today is a great example. I was trying to sell a stock when the bid was 54.53 and the offer was 54.59 I offered 54.56 to get out of my 3000 shares. After I did a huge order came in for 80,000 shares and I was filled at 54.75. That was an extra $570 in my pocket due to price improvement and the rules a specialist can't trade in front of a customer.

Robert Tharp
 
Don had a good point too. If a huge order of 50,000 shares plus were to hit bids it wouldn't send the market down .70 It would probably go down $2.00. No kidding. Nice point Don

Robert Tharp
 
Vinny1 I think you are missing the point that Don and me are referring to. Huge orders don't hit the inside Nasdaq market spreads with size--nor the NYSE marketplace either. They don't want to be filled 2 points lower they would rather be filled $0.70 away. They will make a deal with market makers/specialist to be filled outside market bid/ask.
One market maker will take the entire order and fill it away on the NASDAQ. On the NYSE the specialist will take the order usually if he can't find a buyer.

On our example he will take 200,000 shares .70 away from the best bid/ask. This is due to the best bid /ask only having 1000 shares. If the fund were to sell at all the bidder they would get a horrible fill on the majority of their trade (they don't do this)


On the NYSE if you have a limit in between this bid/ask you will be filled ---the specialist can't trade for himself if a customer is in front of him. He will let you in on his price improvement--they won't let you have any part of it on the NASDAQ market.
Robert
 
NYSE price improvements account for a big chunk of the profits made by traders. When you fully grasp the complexities of how the orders are handled, you will see what Mr. Tharp and I referring to. If you have a 40.10 bid, even though the stock is reflecting a 40.30 bid, and the stock "prints" down to 39.50, then you get the 30.50 price, and the seller is better off with that price than he would be "hitting every bid" on the way down to $37 or so.

Traders who envelope their pricing when trading have a great edge in the marketplace.

Just sharing....
 
Originally posted by Don Bright
NYSE price improvements account for a big chunk of the profits made by traders. When you fully grasp the complexities of how the orders are handled, you will see what Mr. Tharp and I referring to. If you have a 40.10 bid, even though the stock is reflecting a 40.30 bid, and the stock "prints" down to 39.50, then you get the 30.50 price, and the seller is better off with that price than he would be "hitting every bid" on the way down to $37 or so.

Traders who envelope their pricing when trading have a great edge in the marketplace.

Just sharing....
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Think how powerful this really is.

The market is 40.30 bid 40.40 offered
you were just filled at 39.50.

If you were to sell with a market order immeadiately after being filled you would have an automatic .80 in profit. Not a bad trade.


Heavily profitable the second I enter the trade. I'll take that all day long over NASDAQ.
Robert Tharp
 
Originally posted by rtharp


Think how powerful this really is.

The market is 40.30 bid 40.40 offered
you were just filled at 39.50.

If you were to sell with a market order immeadiately after being filled you would have an automatic .80 in profit. Not a bad trade.


Heavily profitable the second I enter the trade. I'll take that all day long over NASDAQ.
Robert Tharp
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(edited, my mistake)...If you were filled at 39.50 then you would wait a minute for the price to get back to where it was...maybe not immediate, but you present the example correctly. I read the post as "selling with a market order" and getting filled at 39.50 instead of 40. or so...
 
RTharp, you mention that one market maker will take the entire order and fill it away on the Nasdaq. My question : do these big block orders on the Nasdaq print on the time and sales immediately, or if not, when?
 
sometimes immeadiately /sometimes delayed.--- Notice the time and sales when there is a print heavily away from the market and huge size. Those usually aren't misprints but were a market maker taking the other side of a huge order.

Robert
 
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