Reading the specialist

burnin · Sep 12, 2003

Is there anyone out there that has worked on the NYSE floor that can share some insights.

1) For the big caps, how many people staff the post?
e.g. is it one guy? a staff of people?

2) What happens for breaks, vacations...etc...who takes over?

3) Are there "locals" standing around those posts? do they have a better chance of being late to a print and still participating?
e.g does specialist save some for the crowd?

Thats just a few to start. Hoping we can get a decent thread goin here.

Thanks to anyone that can add some value to this post.

javaboy · Sep 13, 2003

I'd love a great discussion on this thread. Knowing the mechanics of the floor would be really interesting and even helpful in our trading.. (But really, can you truly tell when one specialist replaces another because the two trade differently? (something said of bright's traders...))

Compared to the "chaos" of nasdaqs negotiated market, the alleged benefits of trading the big board is that all trades go through one conduit, somebody is actively enforcing a fair and open market, yada, yada, yada.

Would love to hear a jaded trader w/ lots of experience give their description.

Or short of that, can somebody recommend a book that gives a fairly recent, accurate sense of what really happens on the floor?

klein · Sep 18, 2003

I can definitely tell when there is a different specialist trading my stocks. Different specialists have different styles and tricks. These idiosyncracies by the specialist make certain moves predictable. An example of this is a few years ago when one of my main stocks (irf) specialist got fired (I found this out from a freind on the floor) Up till that point the stock was easy money, After that it became pretty tough to trade from a tape reading perspective.

mdl060374 · Sep 18, 2003

Quote from klein:

I can definitely tell when there is a different specialist trading my stocks. Different specialists have different styles and tricks. These idiosyncracies by the specialist make certain moves predictable. An example of this is a few years ago when one of my main stocks (irf) specialist got fired (I found this out from a freind on the floor) Up till that point the stock was easy money, After that it became pretty tough to trade from a tape reading perspective.

I am a recent convert to listed stockfrom NASDAQ so bear with me. When you say it was easier to traade what tricks are you refering to that the new spec. used.

Did he always hit stop orders and then swing it back to where it was trading? Did he sit a penny in fron of you all th etime?

What other tricks are out there that I am not aware of?

Anyone feel free to chime in.
thanks in advance

DaveN · Sep 19, 2003

One behaviour that I've noticed in a couple of stocks that trade closely with the SPoos is the following: Say both the SPoos and this stock are strong that day. The market has pulled in a bit and starts to rally. For some reason, the specialist will print up 2, 3 or 4 cents, then print back down 2 cents below the original before taking the stock back up.

I know this is not a late print report because I've often been the one getting filled 2 cents down on my order sitting in the book. I'll see my fill before I see the print go off on the tape.

C Robinson · Sep 19, 2003

Quote from DaveN:

.......... For some reason, the specialist will print up 2, 3 or 4 cents, then print back down 2 cents below the original before taking the stock back up.......

probably in order to get long or add to his long position. the specialist needs a downtick in order to buy the stock.

TraderNYC · Sep 19, 2003

I was in SLK's(Goldman Sachs) Trader Training Program...I undertsand the Specialsit Role...I was an assistant while in the program...I wil be happy to field any questions.

BuddhaTop · Sep 19, 2003

Quote from TraderNYC:

I was in SLK's(Goldman Sachs) Trader Training Program...I undertsand the Specialsit Role...I was an assistant while in the program...I wil be happy to field any questions.

How was the training program? Did you learn a lot of trading strategies and techniques?

TraderNYC · Sep 19, 2003

Yes...The program was a rotational program...rotated through NASADAQ Capital Markets, Fixed Income Desk, Prop Desk, AMEX Options and ETFs as well as Equities...I was placed on the Amex Options...but really wanted to do the Nasdaq MM'ing...I left after a few months...now I work for Caxton Associates...(hedge fund)

I went to NYIF for lots of classes, Steve Nison taught our candle stick course...they really dropped money on the program and training....

mdl060374 · Sep 19, 2003

Quote from TraderNYC:

..but really wanted to do the Nasdaq MM'ing...

Betcha glad you didnt end up there! (I used to work for NDB upstairs from them. Our doors also shut)