i wonder how come that i never had a complaint about the specialist way of doin' biz and that i always got filled on my trades and often with price improvement even when stock was skyrocketin' or fallin' like a stone, in the most volatile environments of em all...at open and on news stocks...jim can u explain how i can possibly get better treatment than u, please?
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Questions about NYSE
- Thread starter trader_XX
- Start date
Quote from jimrockford:
Many people have NYSE trading strategies which are successful, but which do not achieve their success as a result of the specialist system. Most of those strategies would be even more profitable if the specialist system were abolished.
Quote from Hamlet:
For anyone who cares, the quote above is direct from Rockford's post, which he has just claimed that he did not say.
Hamlet is lying. I never denied writing the text quoted by Hamlet. I instead denied Hamlet's false description of that text.
I am sure that nobody reading this thread is interested in a dispute over who said what. Hamlet will, nevertheless, most likely continue to pursue such disputes, just as he has done in past threads. He seems incapable of anything else, and he is too selfish to realize the worthlessness and disruptive nature of his interference with otherwise valuable debates.
Quote from jimrockford:
Many people have NYSE trading strategies which are successful, but which do not achieve their success as a result of the specialist system. Most of those strategies would be even more profitable if the specialist system were abolished.
Here Rockford is claiming that most successful strategies trading NYSE which do not rely on the NYSE system would be even more profitable if the specialist system were abolished.
Of course he offers no proof of this claim, and when challenged on it he attacks the challenger as he has just done to me. I hope that others here will call him on it as well. I know that when I see such nonsense, I must call the person on it, know matter how many times he will launch a personal attack.
Quote from Bitstream:
i wonder how come that i never had a complaint about the specialist way of doin' biz and that i always got filled on my trades and often with price improvement even when stock was skyrocketin' or fallin' like a stone, in the most volatile environments of em all...at open and on news stocks...jim can u explain how i can possibly get better treatment than u, please?
Sure. We had different strategies, different tactics, different goals, and different personalities, so we received different quality of NYSE order execution. It is also possible that you were robbed blind by the specialists, but that you didn't know it was happening. It should be expected that different traders will be helped or hurt unequally and in different ways by a corrupt specialist system. It should also be expected that different traders will have unequal levels of awareness, when exposed to the same victimization, and even when using identical trading strategies. Unequal experiences provide no evidence by which to defend NYSE.
Let me give an example. volente00, earlier in this thread, explained that he never had any trouble at all, in getting NYSE stock traded on Island. He gave this info, apparently as evidence against those like me, who complain that stale NYSE quotes, acting through the power bestowed upon them by the trade-thru rule, interfere with trading at other venues, like Island. It was only after some discussion and detective work that we confirmed that his experience had been limited to just one particular NYSE symbol, during a time window when Island trades on that symbol, WMT, were NOT yet governed by the trade-thru rule.
This example provides a good illustration as to why you cannot dismiss the experiences of other traders, simply by relying solely upon your own experiences as one single trader, which won't be representative of the market as a whole.
Please note that my own criticisms of NYSE are not based merely on my own trading experiences, but also on what other traders and experts have shared on EliteTrader and in various other fora.
Are the NYSE officials, government prosecutors, and judges who nail corrupt specialists also nothing more than "bashers" and "conspiracy theorists"?
If the specialists and exchange officials aren't conspiring, front running, breaking their own rules, stealing and cheating, then why are they constantly settling civil charges brought by the government, and why are they now even starting to plead guilty in criminal cases? Here is an example:
http://newyork.fbi.gov/dojpressrel/pressrel06/securitiesfraud051206.pdf
If the specialists and exchange officials aren't conspiring, front running, breaking their own rules, stealing and cheating, then why are they constantly settling civil charges brought by the government, and why are they now even starting to plead guilty in criminal cases? Here is an example:
http://newyork.fbi.gov/dojpressrel/pressrel06/securitiesfraud051206.pdf
United States Attorney
Southern District of New York
FOR IMMEDIATE RELEASE CONTACT: U.S. ATTORNEY'S OFFICE
May 12, 2006 HERBERT HADAD, MEGAN GAFFNEY
HEATHER TASKER, BRIDGET KELLY
PUBLIC INFORMATION OFFICE
(212) 637-2600
TWO FORMER NEW YORK STOCK EXCHANGE SPECIALISTS
PLEAD GUILTY TO FEDERAL SECURITIES FRAUD CHARGES
MICHAEL GARCIA, the United States Attorney for the Southern
District of New York, announced that JOSEPH BONGIORNO and PATRICK
MCGAGH, former registered specialists on the New York Stock
Exchange (the âNYSEâ), pleaded guilty today to violating federal
securities laws. The charges arise from the specialistsâ
fraudulent and improper trading from approximately 1999 through
early 2003.
As charged in the Indictment, purchases and sales of
securities on the NYSE must generally be executed through a
specialist who works on the floor of the exchange. Each security
listed for trading on the NYSE is assigned to a particular
specialist and is traded through an assigned âpostâ on the floor
of the exchange. Both BONGIORNO and MCGAGH acted as specialists
at Van der Moolen Specialists USA, LLC (âVDMâ) and were members
of the management committee at VDM. During their tenure as
specialists on the floor of the NYSE, each served as an NYSE
floor official, responsible for supervising and regulating
trading floor activities. BONGIORNO also served as one of twenty
senior officials known as Floor Governors. During the relevant
period, BONGIORNO was the specialist assigned to trade Hewlett
Packard Co., and MCGAGH at various times was the specialist
assigned to trade Nortel Networks Communications and Pfizer Inc..
According to the Indictment, orders to purchase or sell
securities are presented to a specialist in one of two ways â
either orally and in person by a floor broker on the floor of the
NYSE, or electronically using the NYSEâs Super Designated Order
Turnaround System (âSuper DOTâ).
2
As explained in the Indictment, after receiving an order to
buy or sell a security, the specialist can execute or âfillâ the
order in one of two ways. Generally, the specialist must match
any open orders to buy from one investor with an open order to
sell from another investor within the same price range. Orders
executed in this manner are generally referred to as âagencyâ
orders because the specialist simply acts as an agent who matches
orders from willing buyers with willing sellers. If there is no
matching order to buy and order to sell in the same price range
at a given time, a specialist generally may execute an investorâs
order to buy by selling from the specialistâs propriety account,
or âinventory,â and may execute an order to sell by buying the
stock for the specialistâs inventory. This method of executing
an order is called trading on a âprincipalâ or âdealerâ basis.
NYSE rules prohibit a specialist from buying or selling
securities on a principal or dealer basis â in other words, by
participating in the deal as a buyer or seller itself â if the
specialist were aware of pending orders from investors at the
same price.
According to the Indictment, the defendants systematically
violated NYSE rules and breached their duties to refrain from
buying and selling stock for their proprietary or dealer accounts
while in the possession of executable customer buy and sell
orders, in furtherance of a scheme to defraud purchasers and
sellers of stock on the NYSE. Instead, the defendants effected
improper proprietary trades at the expense of public orders by
one of two means. By âtrading aheadâ of public orders â i.e., by
filling customer buy and sell orders through principal trades
from their dealer accounts in front of executable customer
orders, the defendants trade from their dealer accounts at the
most advantageous price, and then by executed agency orders with
which they were entrusted at a less advantageous price than they
had received for their proprietary accounts. By
âinterpositioningâ themselves between these orders - i.e., either
purchasing stock for their proprietary accounts from customer
sell orders, and then filling customer buy orders by selling from
their proprietary accounts at a higher price, or selling stock
from their proprietary accounts to fill customer buy orders, and
then filling customer sell orders by buying for their proprietary
accounts at a lower price. The defendants BONGIORNO and MCGAGH
and their firmâs proprietary account profited by capturing the
spread between the lower price at which they bought stock from
customer sell orders and the higher price at which they sold
stock to customer buy orders.
3
BONGIORNO and MCGAGH each pleaded guilty to one count of
securities fraud in connection with their unlawful trading
activities. At the plea hearing, the Government described the
case as involving âsecurities fraud charges in an area where
criminal charges have never before been broughtâ and the
defendantsâ acknowledgment of guilt as âground-breaking.â
According to the Indictment, illegal trading profits earned
for VDMâs proprietary account as a result of BONGIORNOâs
interpositioning totaled approximately $1.3 million, and customer
harm caused as a result of BONGIORNOâs trading ahead totaled
approximately $1.2 million.
As a result of their guilty pleas, BONGIORNO, 51, of
Brooklyn, New York, and MCGAGH, 40, of Little Silver, New Jersey,
each face a maximum sentence of 20 years in prison and a maximum
fine of $5,000,000 or twice the gross gain or loss resulting from
the offense. The sentencings for BONGIORNO and MCGAGH are
scheduled for August 10, 2006, at 2:00 p.m. and 3:00 p.m.,
respectively, before United States District Judge SIDNEY H.
STEIN.
Mr. GARCIA praised the efforts of the Federal Bureau of
Investigation. Mr. GARCIA also thanked the Securities and
Exchange Commission and the NYSE for their continued assistance
during the investigation.
Assistant United States Attorneys LAUREN GOLDBERG and
ANTHONY S. BARKOW are in charge of the prosecution, together with
CHRISTOPHER M. CASTANO of the Securities and Exchange Commission,
who was designated as a Special Assistant United States Attorney
for purposes of this case.
06-067 ###
Southern District of New York
FOR IMMEDIATE RELEASE CONTACT: U.S. ATTORNEY'S OFFICE
May 12, 2006 HERBERT HADAD, MEGAN GAFFNEY
HEATHER TASKER, BRIDGET KELLY
PUBLIC INFORMATION OFFICE
(212) 637-2600
TWO FORMER NEW YORK STOCK EXCHANGE SPECIALISTS
PLEAD GUILTY TO FEDERAL SECURITIES FRAUD CHARGES
MICHAEL GARCIA, the United States Attorney for the Southern
District of New York, announced that JOSEPH BONGIORNO and PATRICK
MCGAGH, former registered specialists on the New York Stock
Exchange (the âNYSEâ), pleaded guilty today to violating federal
securities laws. The charges arise from the specialistsâ
fraudulent and improper trading from approximately 1999 through
early 2003.
As charged in the Indictment, purchases and sales of
securities on the NYSE must generally be executed through a
specialist who works on the floor of the exchange. Each security
listed for trading on the NYSE is assigned to a particular
specialist and is traded through an assigned âpostâ on the floor
of the exchange. Both BONGIORNO and MCGAGH acted as specialists
at Van der Moolen Specialists USA, LLC (âVDMâ) and were members
of the management committee at VDM. During their tenure as
specialists on the floor of the NYSE, each served as an NYSE
floor official, responsible for supervising and regulating
trading floor activities. BONGIORNO also served as one of twenty
senior officials known as Floor Governors. During the relevant
period, BONGIORNO was the specialist assigned to trade Hewlett
Packard Co., and MCGAGH at various times was the specialist
assigned to trade Nortel Networks Communications and Pfizer Inc..
According to the Indictment, orders to purchase or sell
securities are presented to a specialist in one of two ways â
either orally and in person by a floor broker on the floor of the
NYSE, or electronically using the NYSEâs Super Designated Order
Turnaround System (âSuper DOTâ).
2
As explained in the Indictment, after receiving an order to
buy or sell a security, the specialist can execute or âfillâ the
order in one of two ways. Generally, the specialist must match
any open orders to buy from one investor with an open order to
sell from another investor within the same price range. Orders
executed in this manner are generally referred to as âagencyâ
orders because the specialist simply acts as an agent who matches
orders from willing buyers with willing sellers. If there is no
matching order to buy and order to sell in the same price range
at a given time, a specialist generally may execute an investorâs
order to buy by selling from the specialistâs propriety account,
or âinventory,â and may execute an order to sell by buying the
stock for the specialistâs inventory. This method of executing
an order is called trading on a âprincipalâ or âdealerâ basis.
NYSE rules prohibit a specialist from buying or selling
securities on a principal or dealer basis â in other words, by
participating in the deal as a buyer or seller itself â if the
specialist were aware of pending orders from investors at the
same price.
According to the Indictment, the defendants systematically
violated NYSE rules and breached their duties to refrain from
buying and selling stock for their proprietary or dealer accounts
while in the possession of executable customer buy and sell
orders, in furtherance of a scheme to defraud purchasers and
sellers of stock on the NYSE. Instead, the defendants effected
improper proprietary trades at the expense of public orders by
one of two means. By âtrading aheadâ of public orders â i.e., by
filling customer buy and sell orders through principal trades
from their dealer accounts in front of executable customer
orders, the defendants trade from their dealer accounts at the
most advantageous price, and then by executed agency orders with
which they were entrusted at a less advantageous price than they
had received for their proprietary accounts. By
âinterpositioningâ themselves between these orders - i.e., either
purchasing stock for their proprietary accounts from customer
sell orders, and then filling customer buy orders by selling from
their proprietary accounts at a higher price, or selling stock
from their proprietary accounts to fill customer buy orders, and
then filling customer sell orders by buying for their proprietary
accounts at a lower price. The defendants BONGIORNO and MCGAGH
and their firmâs proprietary account profited by capturing the
spread between the lower price at which they bought stock from
customer sell orders and the higher price at which they sold
stock to customer buy orders.
3
BONGIORNO and MCGAGH each pleaded guilty to one count of
securities fraud in connection with their unlawful trading
activities. At the plea hearing, the Government described the
case as involving âsecurities fraud charges in an area where
criminal charges have never before been broughtâ and the
defendantsâ acknowledgment of guilt as âground-breaking.â
According to the Indictment, illegal trading profits earned
for VDMâs proprietary account as a result of BONGIORNOâs
interpositioning totaled approximately $1.3 million, and customer
harm caused as a result of BONGIORNOâs trading ahead totaled
approximately $1.2 million.
As a result of their guilty pleas, BONGIORNO, 51, of
Brooklyn, New York, and MCGAGH, 40, of Little Silver, New Jersey,
each face a maximum sentence of 20 years in prison and a maximum
fine of $5,000,000 or twice the gross gain or loss resulting from
the offense. The sentencings for BONGIORNO and MCGAGH are
scheduled for August 10, 2006, at 2:00 p.m. and 3:00 p.m.,
respectively, before United States District Judge SIDNEY H.
STEIN.
Mr. GARCIA praised the efforts of the Federal Bureau of
Investigation. Mr. GARCIA also thanked the Securities and
Exchange Commission and the NYSE for their continued assistance
during the investigation.
Assistant United States Attorneys LAUREN GOLDBERG and
ANTHONY S. BARKOW are in charge of the prosecution, together with
CHRISTOPHER M. CASTANO of the Securities and Exchange Commission,
who was designated as a Special Assistant United States Attorney
for purposes of this case.
06-067 ###
Quote from jimrockford:
Sure. We had different strategies, different tactics, different goals, and different personalities, so we received different quality of NYSE order execution. It is also possible that you were robbed blind by the specialists, but that you didn't know it was happening. It should be expected that different traders will be helped or hurt in different ways by a corrupt specialist system. It should be expected that different traders will have different levels of awareness, when exposed to the same victimization. These different experiences provide no evidence by which to defend NYSE.
yeah, but still doesn't explain' how on earth u got so much to complain and i have nothin' to say; if there was real common spread malpractice as u state i would have got hurt by the spec as well, innit. and how can u say i got robbed blind when i got price improvement many times? even if there was a better price sure i dont complain, since on nasdaq i rarely get even 1c better on my trades.
if u trade illiquid shite u get what u get, u know u can expect anythin' from a very thin mkt. i have to guess that u complain about price behavior on those mkts, not on more popular issues because i dont trade only the open and u just cannot make a case for me to get away with it and u to be punished on a reg basis, it just dont make sense.
Let me give an example. volente00, earlier in this thread, explained that he never had any trouble at all, in getting NYSE trades done on Island. He gave this info, apparently as evidence against those like me, who complain that stale NYSE quotes, acting through the power bestowed upon them by the trade-thru rule, interfere with trading at other venues, like Island. It was only after some discussion that we confirmed that his experience had been limited to just one particular NYSE symbol, during a time window when Island trades on that symbol, WMT, were NOT yet governed by the trade-thru rule.
This example provides a good illustration as to why you cannot dismiss the experiences of other traders, simply by relying solely upon your own experiences as one single trader, which won't be representative of the market as a whole.
still dont make sense since i got a new grid every day and traded almost all the issues listed so far, over and over again..as i said if theres widespread corruption im sure i would have noticed it.
Please note that my own criticisms of NYSE are not based merely on my own trading experiences, but also on what other traders and experts have shared on EliteTrader and in various other fora.
u criticize nyse yet u fail to see how common is price manipulation on naz as well...on friday i sold a down gap 1hour or so after the open and took a beatin' because a bastid lookin' for better prices cleaned the book in matter of seconds just to fade it hard and leave a massive 2%+spike behind. the stock is ttwo, check out the chart and time and sale. point is every mkt has crooks and nyse is sure no worse than any other mkt out there.
Quote from jimrockford:
Are the NYSE officials, government prosecutors, and judges who nail corrupt specialists also nothing more than "bashers" and "conspiracy theorists"?
If the specialists and exchange officials aren't conspiring, front running, breaking their own rules, stealing and cheating, then why are they constantly settling civil charges brought by the government, and why are they now even starting to plead guilty in criminal cases? Here is an example:
http://network/dojpressrel/pressrel06/securitiesfraud051206.pdf
Faulty logic from my friend Rockford again.
Everyone reading knows that in any population, be it CEOs, police, doctors, lawyers, priests, schoolteachers, rabbis and even specialists that there will be some who will do wrong. This is the nature of humans and so it shall be until the end of time. Rockford keeps posting links to these old incidents all over ET. What is his point? He ignores challenges to his claims, and seeks only to obfuscate
Jim, please go to bed. Just call it a night man. This is getting very tiresome. The specialist system is the only system in the world that I am aware of that a guy can get price improvement on a regular basis on his trades. All you have to do is learn to read the tape. I'm not saying that's easy, but it is what it is. If you don't like trading with all the corrupt traders, hedge funds, floor brokers, market makers, institutions, then go teach 3rd grade public school.
Quote from Maverick74:
Jim, please go to bed. Just call it a night man. This is getting very tiresome. The specialist system is the only system in the world that I am aware of that a guy can get price improvement on a regular basis on his trades. All you have to do is learn to read the tape. I'm not saying that's easy, but it is what it is. If you don't like trading with all the corrupt traders, hedge funds, floor brokers, market makers, institutions, then go teach 3rd grade public school.
thats the whole point innit..no way u can get improvement so often in any other mkt and that saves u a lot, nevermind nyse is easier to read and trends more often...i just dont get this countinous bashin of the spec. when almost of my orders routed trough smart ended up at nyse cuz there was a better price and those routed directly profited from even better improvements.