Traders are market makers to the extent that we participate in the market. The area that specialists have is carved out for them and protected for them and by them. There is great risk in being THE market maker of record. There is less risk associated with being a market-maker-at-will. But it is open to anyone with capital.
SpecialistMan - by John Bogle
- Thread starter Tea
- Start date
Well put...it's nice to have the rights, without the responsibilities ala many MM's.
Don
having spent some time down there (NYSE) the truth is somewhere in the middle....It i pretty hard for a specialist to giggle around a MO or GE.......there is always someone on both sides.......as far as "stabilizing"....come on! If the real "owners" of these shares.....funds....the company themselves, etc...don't show up...why should a market maker?
I know that the MM's don't "have" to show up....my only point is that if we have a single marketplace, then it is much easier to either "stop trading" or stabilize....and I know the Specialists are neither saints nor philanthropists...
Slow day for the holiday....
Don
http://www.miami.com/mld/miamiherald/business/industries/banking/5684023.htm
"Fleet Specialist confirmed last week that on April 14 the firm suspended specialist David Finnerty, who handles trading of GE stock, while it cooperates with the NYSE's investigation and conducts its own internal review."
"Fleet Specialist confirmed last week that on April 14 the firm suspended specialist David Finnerty, who handles trading of GE stock, while it cooperates with the NYSE's investigation and conducts its own internal review."
Well, I'm glad they're at least attempting to do something about it....now go after the brokerage firms and mutual funds...
Oh yeah, they already are....
Don
For all its issues, I still like trading NYSE more than any other marketplace. The key is to choose your opponents (specialists) wisely and don't put you head in the mouth of the lion (dont use market orders, etc.). Testing the stocks you're going to trade is key. I've traded with some specialists who've done me more favors than I can count, others will take my money if at all possible.
However, I see a lot of posts complaining about NYSE, but nothing about AMEX. Their rules have way more freedom for the specialist than NYSE. Try trading with any AMEX stock for a day, the most cutthroat NYSE specialist will seem like a saint in comparison.
However, I see a lot of posts complaining about NYSE, but nothing about AMEX. Their rules have way more freedom for the specialist than NYSE. Try trading with any AMEX stock for a day, the most cutthroat NYSE specialist will seem like a saint in comparison.
Give'em hell Hank!
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AIG chief attacks NYSE
"Maurice "Hank" Greenberg, chairman of AIG, has heavily criticised the New York Stock Exchange's specialist system for trading shares, saying an alternative without human intervention might be better for large companies.
Mr Greenberg, head of the world's largest insurance company for more than 30 years, says the NYSE relies on a system that does not "always work in the best interests of investors".
His comments, in an article in Thursday's Financial Times, come as the exchange is going through a period of upheaval. Richard Grasso, its chairman, left last month after a storm of criticism over his pay and John Reed, his interim successor, is currently reviewing the exchange's governance.
Exchange specialists match buy and sell orders for particular shares. They are supposed to make a market when liquidity would otherwise be lacking. AIG's specialist is Spear Leeds, a unit of Goldman Sachs. Mr Grasso was reported last week to have handled complaints about trading from Mr Greenberg, and to have spoken to Spear Leeds.
Mr Greenberg says he has a duty to ensure that AIG investors can buy and sell in a fair, efficient and transparent market. He says he has complained to Goldman Sachs as well as the NYSE over the specialist system.
For large-capitalisation stocks, he believes that specialists have not always committed enough capital to maintain an orderly market.
"If the specialist cannot effectively perform his role then we need to look for alternatives including the electronic matching of buyers and sellers, with no human intervention."
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AIG chief attacks NYSE
"Maurice "Hank" Greenberg, chairman of AIG, has heavily criticised the New York Stock Exchange's specialist system for trading shares, saying an alternative without human intervention might be better for large companies.
Mr Greenberg, head of the world's largest insurance company for more than 30 years, says the NYSE relies on a system that does not "always work in the best interests of investors".
His comments, in an article in Thursday's Financial Times, come as the exchange is going through a period of upheaval. Richard Grasso, its chairman, left last month after a storm of criticism over his pay and John Reed, his interim successor, is currently reviewing the exchange's governance.
Exchange specialists match buy and sell orders for particular shares. They are supposed to make a market when liquidity would otherwise be lacking. AIG's specialist is Spear Leeds, a unit of Goldman Sachs. Mr Grasso was reported last week to have handled complaints about trading from Mr Greenberg, and to have spoken to Spear Leeds.
Mr Greenberg says he has a duty to ensure that AIG investors can buy and sell in a fair, efficient and transparent market. He says he has complained to Goldman Sachs as well as the NYSE over the specialist system.
For large-capitalisation stocks, he believes that specialists have not always committed enough capital to maintain an orderly market.
"If the specialist cannot effectively perform his role then we need to look for alternatives including the electronic matching of buyers and sellers, with no human intervention."
Yeah, what a joke! He wants GS to hold up the stock in his company. How about a Corporate Buyback?? Hold your own darn stock up. I'm preparing an op-ed piece in response to this ex NYSE board member. Where was he when Grasso's pay was discussed....??? The "electronic marketplace" would not even help in holding up AIG (or providing more stock).
Another point is that the AIG market cap is Because the stock has gone up in price. I realize that some Specialists are better than others, but don't blame the system for one (perhaps not so goo) specialist. There are many who are very concerned about the U.S. and it's political systems, legal system, etc. based on some questionable decisions...does that mean we should revert to socialisim, or mayber a Monarchy? Of course not, let's use the best system we can, and be diligent in policing it.
(more to come in print, I'll keep you all posted)...
Don