Originally posted by ron2368
I remember hearing on TV a few weeks ago that NYSE sepcialist profits for 2001 were down nearly 50% from the prior year.
Well that could certainly be. 2000 was a record year for almost everyone in any sort of trading. NYSE OpenBook is one of a few bones they've thrown recently to keep the NYSE in business and in a large marketshare position.
Basically, the NYSE wants to keep things the status quo as much as possible. But they are under pressure, with ECNs, Nasdaq, etc. slowly but surely sucking away business. So they throw some bones. People want to see the book, to reduce the extent to which the specialist can screw with you. So they give you OpenBook (which has been delayed many times so far). But openbook is only going to update the book out to those who look at it periodically -- I think every 15 seconds.
Then there's the issue of backing away from quotes. Some specialists don't do it. Others screw you on it. For example: Say you're short and wanting to cover. The stock is 15.20 bid, 25 offer, each for 100. The 25 offer trades, and you see a decent sized offer at 26, for say, 10000 shares. So you click fast to "BUY 10,000 XYZ @ 15.26". But you don't get a fill. Instead, you wait and wait and wait, and eventually find yourself now on the bid (bidding 15.26 for 10,000), or perhaps even below the bid, with the offer now at 15.30. So people complain, and now you have NYSE Direct+. If marketable orders are sent there, and they are for less than 1100 shares, you get the fill BEFORE the specialist has a chance to change anything. So there it is -- a second bone.
On the NYSE, the specialist can screw with you, waiting to see what other orders pop up while you're waiting for your fill or cancel. In some stocks, the specialists are reasonably fair. In others, they're criminal.
When the word manipulate is used lots of folks defend the specialist system of the nyse, one word above I liked was "auction". I would not compare the NYSE to trading pork bellieswhich are about the same as some illiquid otc stocks but I do think the specialist system does allow a bit more price running . The Nyse T ans S is one of the few places where a stock can trade thousands of shares in sells with some 100 share buys thrown in and still go up a .5 or more. One stock I have traded where I see this is SHW. But it can also present an opportunity for a short( if you can get filled). Many times I think the Specialist knows its going down and will give you 100 shares and then the price moves quickly away. KKD is so bad with that I wont ever try to short it.
:eek:
Well, the NYSE is at least an auction, with a single order book. Nasdaq gives you lightning fast fills, but their dealer system is just not geared towards giving the customer (you and I) the best price. Without a central order book, it's pretty much impossible, though.
On the other hand, the major european markets are a bit better. I like CME's Globex actually. Very simple. Very straightforward. No games.
Ciao.
The monolpoly which the NYSE has needs to be broken up like Michael jordan's marriage. By the way, I think the whole Enron saga should be a lesson to all those investors and employees who were repeatedly sodomized by the board of directors. Do you think they used condoms? LOL, what a bunch of morons, and the US gov. pretends like they "had no idea" -- lol. How funny is that? 
