yeah. but without the specialist, or some dedicated, well capitalized market maker somewhere, the market suddenly becomes very prone to meltdown. you might as well have the guy next to you or in China doing your brain surgery as making your market.
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Questions about NYSE
- Thread starter trader_XX
- Start date
yeah. but without the specialist, or some dedicated, well capitalized market maker somewhere, the market suddenly becomes very prone to meltdown. you might as well have the guy next to you or in China doing your brain surgery as making your market.
It is amazing to me that something I see happen to me about 90% of the time when I direct orders to NYSE, is not being seen by some of the "NYSE specialists always fill orders properly" proponents on this thread.
By all standards, I am a small retail trader trading his own account, so I don't have the clout of all of you prop traders out there. I typically trade 1000 share lots and here is what happen most of the time:
1) Specialist does not fill the order right away even though my order is the best one out there (based on what is being displayed on the quote screen). In fact sometimes my order will not even be displayed. Now sometimes this is good as they may actually fill me at a better price, but most of the time it is not in my favor and I never get filled.
2) I get filled and the market immediately moves against my position, especially if my order was to open a short position. Most of the time this happens in less than a second, even in a stock that had had no movement before my order hit. The prices would move some ridiculous amount against me and held there, hoping that I would close out the position at a loss. I have actually tested this and taken the loss, only to see the market immediately move back to where I entered or even turn to what would would have been a profitable trade for me.
3) Many times when I get filled and the market moves against me, the "market" seems to have a magnetic memory of exactly where my entry is and will never reverse past the point where I will be profitable. Let me explain. Let's say I short a stock and get filled at 65.50. The market would move against my position and say go up to 66.00. The market would then start reversing and move in my favor and start approaching my entry price. "Magically" the market stops dead right at my entry price, plus or minus a penny, and holds there. After waiting for an extremely long time, I get fed up and close my position for either a couple pennies loss or profit. Immediately after that the market continues on down and I watch as I lose out on what would have been an extremely profitable trade. Now I may be paranoid, and maybe my small 1000 share orders are of no consequence to these specialists as indicated by others in this thread, but this seems to happen on about 90% of my orders, many times a day, so there must be something seriously wrong with me, or I must be trading with a virtual market where they are playing games with me, without realizing it.
BTW, these are not thin stocks. These are stocks that trade several million shares a day.
Echo
By all standards, I am a small retail trader trading his own account, so I don't have the clout of all of you prop traders out there. I typically trade 1000 share lots and here is what happen most of the time:
1) Specialist does not fill the order right away even though my order is the best one out there (based on what is being displayed on the quote screen). In fact sometimes my order will not even be displayed. Now sometimes this is good as they may actually fill me at a better price, but most of the time it is not in my favor and I never get filled.
2) I get filled and the market immediately moves against my position, especially if my order was to open a short position. Most of the time this happens in less than a second, even in a stock that had had no movement before my order hit. The prices would move some ridiculous amount against me and held there, hoping that I would close out the position at a loss. I have actually tested this and taken the loss, only to see the market immediately move back to where I entered or even turn to what would would have been a profitable trade for me.
3) Many times when I get filled and the market moves against me, the "market" seems to have a magnetic memory of exactly where my entry is and will never reverse past the point where I will be profitable. Let me explain. Let's say I short a stock and get filled at 65.50. The market would move against my position and say go up to 66.00. The market would then start reversing and move in my favor and start approaching my entry price. "Magically" the market stops dead right at my entry price, plus or minus a penny, and holds there. After waiting for an extremely long time, I get fed up and close my position for either a couple pennies loss or profit. Immediately after that the market continues on down and I watch as I lose out on what would have been an extremely profitable trade. Now I may be paranoid, and maybe my small 1000 share orders are of no consequence to these specialists as indicated by others in this thread, but this seems to happen on about 90% of my orders, many times a day, so there must be something seriously wrong with me, or I must be trading with a virtual market where they are playing games with me, without realizing it.
BTW, these are not thin stocks. These are stocks that trade several million shares a day.
Echo
It sounds to me like you´re trying to go short just at the support level. You should be going long there bro.Quote from echo33029:
It is amazing to me that something I see happen to me about 90% of the time when I direct orders to NYSE, is not being seen by some of the "NYSE specialists always fill orders properly" proponents on this thread.
By all standards, I am a small retail trader trading his own account, so I don't have the clout of all of you prop traders out there. I typically trade 1000 share lots and here is what happen most of the time:
1) Specialist does not fill the order right away even though my order is the best one out there (based on what is being displayed on the quote screen). In fact sometimes my order will not even be displayed. Now sometimes this is good as they may actually fill me at a better price, but most of the time it is not in my favor and I never get filled.
2) I get filled and the market immediately moves against my position, especially if my order was to open a short position. Most of the time this happens in less than a second, even in a stock that had had no movement before my order hit. The prices would move some ridiculous amount against me and held there, hoping that I would close out the position at a loss. I have actually tested this and taken the loss, only to see the market immediately move back to where I entered or even turn to what would would have been a profitable trade for me.
3) Many times when I get filled and the market moves against me, the "market" seems to have a magnetic memory of exactly where my entry is and will never reverse past the point where I will be profitable. Let me explain. Let's say I short a stock and get filled at 65.50. The market would move against my position and say go up to 66.00. The market would then start reversing and move in my favor and start approaching my entry price. "Magically" the market stops dead right at my entry price, plus or minus a penny, and holds there. After waiting for an extremely long time, I get fed up and close my position for either a couple pennies loss or profit. Immediately after that the market continues on down and I watch as I lose out on what would have been an extremely profitable trade. Now I may be paranoid, and maybe my small 1000 share orders are of no consequence to these specialists as indicated by others in this thread, but this seems to happen on about 90% of my orders, many times a day, so there must be something seriously wrong with me, or I must be trading with a virtual market where they are playing games with me, without realizing it.
BTW, these are not thin stocks. These are stocks that trade several million shares a day.
Echo
Quote from volente_00:
Back when I was trading NYSE, I always hit bids and asks on island with limit orders and never had any problems getting filled.
The extent to which Island has been subject to the trade-thru rule has varied over time. It appears you were trading NYSE stocks on Island at a time when Island trades in the particular symbols you traded were not governed by the trade-thru rule. The trade-thru rule presently governs all Island trades in all NYSE-listed stocks. The result is that NYSE stale quotes often make it illegal and impossible to execute trades on Island, ARCA, or elsewhere. If the true market is at 50.51 X 50.55 and rising rapidly, but NYSE is displaying a stale quote at 50.50 X 50.54, then it will be impossible to buy at market at Island, or at any other market center governed by the trade-thru rule, because the trade-thru rule would prohibit any trades at prices higher than the stale NYSE offer of 50.54. Certain exceptions to this rule exist; for example, if the NYSE offer were only for 100 shares, then Island and other markets are permitted to trade thru NYSE, BUT I believe that Island is currently configured so that it won't even take advantage of this particular exception.
mQuote from lfkc60a:
I am not going to waste any more time on this, its apparent you do a lot of posting and not much trading or you would know exactly what is happening
most likely the two of you are at extemes when it comes to posting therefore you both know about the same.
that is a non sequitur or is it?
seats on the exchange would not have gone for the prices they do if it was not a licence to print money.
Jim, when was the trade thru rule started ? I have not traded NYSE since early 2005 . This was on WMT with 1000 share blocks.
Quote from volente_00:
Jim, when was the trade thru rule started ? I have not traded NYSE since early 2005 . This was on WMT with 1000 share blocks.
The trade-thru rule started in the 1970s, but its terms, its application to the markets, and its effects and consequences have varied over time. The trade-thru rule is part of the Inter-market Trading System (ITS) Plan, which was approved by the SEC in 1978 as its "Plan for the Purpose of Creating and Operating an Intermarket Communications Linkage Pursuant to Section 11A(c)(3)(B) of the Securities Exchange Act of 1934." See Securities Exchange Act Release No. 14661 (Apr. 14, 1978), 43 FR 17419 (Apr. 24, 1978). The old-trade thru rule will be gradually replaced, in phases over time, by the new Regulation NMS.
Your experience in trading one particular NYSE symbol, WMT, in early 2005, on Island says very little to contradict experiences of other people who traded at other times. I am attaching and linking to an Island announcement from March 3, 2006, stating that effective March 6, 2006, Island would begin representing its WMT quotes in the Consolidated Quote System (CQS), thereby bringing all Island WMT trades within the ambit of the trade-thru rule. The announcement states that Island will begin checking to prevent Island WMT executions in violation of the trade-thru rule. This now prevents WMT trades through quotes on NYSE or elsewhere in the Inter-market Trading System (ITS), so that your past experience no longer reflects current reality.
Try to remember that market rules and structures change over time, so that you should be careful before jumping to conclusions that the experiences reported by others are not true. Try also to remember that your particular style of trading might not be a meaningful indicator of the experiences of other traders who trade differently, so that once again, you should not jump to conclusions before dismissing the experiences reported by other traders. You only traded WMT, but that symbol was not handled by Island in the same way as all other NYSE symbols.
Here is the link to the Island announcement:
http://www.island.com/subscribers/emailarchive/2006/20060303.asp
Here is the text of the announcement:
March 3, 2006
AUDIENCE
All INET Subscribers
SUMMARY
Effective Monday, March 6, 2006, INET ATS, Inc. will begin representing its orders in the following exchange-listed securities to the National Stock Exchange:
AL (Alcan Inc.)
BP (BP plc)
BTU (Peabody Energy Corp.)
CI (CIGNA Corp.)
CNQ (Canadian Natural Resources Ltd.)
CTX (Centex Corp.)
ED (Consolidated Edison Inc.)
GG (Goldcorp Inc.)
GRP (Grant Prideco Inc.)
GS (Goldman Sachs Group Inc.)
IWO (iShares Russell 2000 Growth Index)
JKL (iShares Morningstar Small Value Index)
KMG (Kerr-McGee Corp.)
KWK (Quicksilver Resources Inc.)
OEF (iShares S&P 100 Index)
PGR (Progressive Corp.)
PH (Parker-Hannifin Corp.)
PHM (Pulte Homes Inc.)
PTR (PetroChina Co. Ltd.)
PXD (Pioneer Natural Resources Co.)
PXP (Plains Exploration & Production Co.)
RSH (RadioShack Corp.)
SWN (Southwestern Energy Co.)
TDW (Tidewater Inc.)
TLM (Talisman Energy Inc.)
WMT (Wal-Mart Stores Inc.)
Please note that as a result of INET's decision to publicly display its orders in these stocks in the official Consolidated Quote through the National Stock Exchange (formerly Cincinnati Stock Exchange), all orders and executions are subject to trade-through prohibitions. To better understand the implications of this rule, please review the brief examples in this notice.
WHY ARE YOU DOING THIS?
Due to INET's increasing success in the trading of exchange-listed securities with more than a three-fold increase in market share since the third quarter of 20041, INET will be disseminating its top of book in select exchange-listed securities through the National Stock Exchange. Although INET continues to be concerned about the effects of the trade-through rule, INET believes that displaying limit orders in these stocks through the National Stock Exchange provides the best possible trading environment for the most subscribers.
WHAT DO I HAVE TO DO?
You do not have to do anything to support this change if you currently rely on the ITCH® data feed for INET data. If you rely on the Consolidated Quote for INET data, orders on INET will be displayed through the National Stock Exchange. You should be aware, however, that not every National Stock Exchange quote will necessarily represent an order displayed on INET since other broker-dealers may display quotations through the National Stock Exchange. For this reason, we recommend that INET subscribers use the ITCH® data feed to obtain INET market data.
If you are not currently an ITCH® data subscriber and would like access to INET's limit order book information, please contact an INET Subscriber Services representative by calling (212) 231-5180.
ISN'T THERE A THREE-CENT DE MINIMIS EXEMPTION IN THESE SECURITIES?
No. These securities were not included in the SEC's pilot program. In general, broker-dealers that participate in the Intermarket Trading System in exchange-listed securities are precluded from trading at a price inferior to that displayed by another market. This is known as the "trade-through rule." Although the SEC adopted a temporary three-cent de minimis exemption for SPY and DIA, the exemption is not applicable to other securities.
HOW DOES THE TRADE-THROUGH RULE AFFECT MY TRADING?
As a result of the trade-through rule, the INET system will check prices before and after order entry to ensure compliance with the trade-through rule. Below is a description of these checks.
Order entry - At the time of order entry, every order will be checked to ensure that it does not lock or cross the market, or cause an execution at a price that would constitute a violation of the trade-through rule. If an order locks the market, it will be turned into a non-display order so as not to quote a locked market. If an order crosses the market, or would cause a trade-through violation, it will be re-priced to the current low offer (for bids) or to the current best bid (for offers), and turned into a non-display order so as to not quote a locked market. Any non-display order that crosses the market will be re-priced to the current low offer (for bids) or to the current best bid (for offers).
Example:
The National Best Bid in IWO is $77.55.
INET Subscriber enters an order to sell at $77.54.
The INET system will automatically reprice the order to $77.55 and change it to non-display.
Post order entry - An order entered for display will not be affected by the trade-through rule after it is accepted. A non-display order, however, may be cancelled from the INET book with the reason code of #DNT if the market moves through the order after the order is accepted, to prevent trade-throughs.
Example:
The National Best Bid in IWO is $77.55.
INET Subscriber enters a non-display order to sell at $77.55.
The National Best Bid in IWO becomes $77.56.
The non-display order to sell at $77.55 will be cancelled with the reason code #DNT since it cannot be executed without causing a trade-through violation.
WHERE WILL INET DISPLAY ITS QUOTE IN THESE SECURITIES?
INET's top of book will continue to be available through the INET ITCH® data feed and will also be reflected on the Consolidated Quote feed through the National Stock Exchange.
LINKS
SEC Regulation ATS:
http://www.law.uc.edu/CCL/regM/rule301.html
SEC Extends Temporary De minimis Exemption:
http://www.sec.gov/rules/other/34-47950.htm
QUESTIONS
If you have any trading or operational questions or need support on the day of the change, you may contact an INET Equities Transaction Specialist directly by calling (212) 231-5100.
Thank you,
INET
Member NASD/NSX/SIPC
--------------------------------------------------------------------
1 Source: Consolidated Tape Data and Internal Statistics
Quote from Maverick74:
Hogwash. Specialists are not abusing the market and they do indeed provide liquidity. You are making the false assumption when you hit a bid or lift and offer that it's the specialist that is there. What if that order is mine? What if I pull it? ***
I can't even count the amount of money I have made over the years on price improvements from the specialist. You just need to trade with them, not against them. Don't blame losses on the specialist. You would be amazed at how insignificant your orders are to them. They are more concerned about the 100k to 500k orders, not some mook trying to hit a bid for 300 shares.
Maverick74, it appears that you don't understand NYSE quotes.
The published NYSE quote is always, and I emphasize the word always, a specialist quote. The published quoted price and size are controlled by the specialist, who acts as agent executing orders on behalf of you and other traders. If you entrust your non-marketable limit order to the specialist, then the specialist might or might not represent your interest in the published specialist price and size, and might or might not become legally obligated to do so. If he does publicly represent your order, he will do so after a delay which he controls. If your order executes or is cancelled, the specialist might delay before reflecting this fact in the published quote, or he might simply leave the published quote unchanged, perhaps substituting his own interest, or that of others, for your removed interest. If somebody else then tries to interact with that published quote, he might get an execution against some other trader's interest or against the specialist himself, or on the other hand, he might not get an execution at all. If he doesn't get an execution, he might be told that there was "stock ahead", meaning that the published quote was essentially stale, since the trading interest it reflected was no longer available (since your order had either already executed or cancelled).
Your arguments, dismissing criticisms of NYSE, have many flaws, including among them, your failure to address the issue of stale quotes, and the ways in which they distort the market and make it unfair. The simple fact that you and a minority of other traders have had strategies for profiting from the NYSE system doesn't mean it is a fair system. Most people lack the special skills required to extract profits from the specialist system. Many people have trading or investment strategies or priorities incompatible with the use of those special skills. NYSE should, in theory, exist as a capital market to benefit the larger society, not just as a casino tilted to benefit the small minority of traders who, like you, have learned how to game the specialist system by reading the markings on the backs of the cards dealt at the blackjack table.
Your argument that the specialists don't care about small orders is also a flawed argument. Large number of small orders aggregate to form large amounts of trading interest, about which specialists do care. It has also been established, in civil and in criminal proceedings, that many specialists have systematically cheated by mishandling small orders, so that they steal small amounts over and over and over again on a large number of small orders, thereby stealing large profits.
How can you and the other NYSE defenders ignore the overwhelming proof of specialist abuses which comes to us from all of the civil and criminal proceedings against specialists, and also against the exchange itself for colluding with specialist misconduct? How can you just ignore the article I posted from the Washington Post, in this thread, about government proceedings against NYSE?
Quote from jimrockford:
The simple fact that you and a minority of other traders have had strategies for profiting from the NYSE system doesn't mean it is a fair system. Most people lack the special skills required to extract profits from the specialist system. Many people have trading or investment strategies or priorities incompatible with the use of those special skills. NYSE should, in theory, exist as a capital market to benefit the larger society, not just as a casino tilted to benefit the small minority of traders who, like you, have learned how to game the specialist system by reading the markings on the backs of the cards dealt at the blackjack table.
Rockford's post is full of disinformation, but right now I will simply point out that the particular statement quoted above where he implies that "special skills" are required to profitably trade NYSE stocks and that the NYSE system should exist to allow more people with different trading/investing strategies to profit through trading NYSE stocks is absent any logic.
Also note that while the serial NYSE bashers and blamers are a highly vocal lot, the astute silent majority of seasoned successful traders has spoken here:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=66422