SpecialistMan - by John Bogle
- Thread starter Tea
- Start date
great article......i wanted to copy and paste most of it.
i have a question for fellow traders.....has anyone else noticed the specialist getting even tougher the last month or so??? i was thinking maybe they know things are going to change and they might as well make as much as possible while it last. some of their "techniques" have gotten so brazen i just sit there and have to laugh.
Quote from MrDinky:
Bogle's right - the first to walk away in a panic market is the specialist. I say eliminate the roadblocks and let competition decide.
One small comment, my friend. "Those who do not learn from history, are doomed to repeat it". (something like that)./ In 1929, with no uptick rule, and everyone simply "letting the competition decide" the Country was thrown into a disaster. In 1987, those who let the competition decide were wiped out to the extent that the Fed had to ask major traders to continue trading even when the didn't want to.
I appreciate your comment, and I, too, am a fan of free markets, supply and demand, open competition and all the rest. But when I've seen the "no one home sign" on so many OTC traders, it makes me wonder a bit. Again, I feel that we need someone to match the orders and prices, and hopefully we will shake out the "bad apples" in the Specialist ranks, and bring in more "good guys."
I saw this same thing happen on the Options Floor. We were finally forced to make markets (My brother and I always did anyway), but the guys who waited around for the big "berries" were then forced to make markets even when they didn't want to. Perhaps something like would work....but we still need a single place, auction type market location, IMO.
Good Discussion, very interesting to hear a good debate rather than the repeat of nonsene here on the board.
Don
Hi Chet....yeah, I spoke to a couple of Specialists, and they get concerned about the overall markets, just like we do. They do have to "cover their A.." a bit, however, and keep plugging away. We say..'never, never' use NX, 'never, never" use Market orders, "never, never" use mechanical stop orders.....this helps quite a bit (as I'm sure you know, I am just reiterating for the other readers).
Don
i remember the "no market order" advise when i traded in vegas but there was one specialist i never had to worry about screwing me. In its heyday the Nokia specialist was awesome. i know i can be very critical of nyse specialist, but i have to say whoever ran the nokia book from 98 to 2001 was the best i ever traded with.
you still don't like NX??? let me guess...no price improvement???
Quote from Don Bright:
One small comment, my friend. "Those who do not learn from history, are doomed to repeat it". (something like that)./ In 1929, with no uptick rule, and everyone simply "letting the competition decide" the Country was thrown into a disaster. In 1987, those who let the competition decide were wiped out to the extent that the Fed had to ask major traders to continue trading even when the didn't want to.
I appreciate your comment, and I, too, am a fan of free markets, supply and demand, open competition and all the rest. But when I've seen the "no one home sign" on so many OTC traders, it makes me wonder a bit. Again, I feel that we need someone to match the orders and prices, and hopefully we will shake out the "bad apples" in the Specialist ranks, and bring in more "good guys."
I saw this same thing happen on the Options Floor. We were finally forced to make markets (My brother and I always did anyway), but the guys who waited around for the big "berries" were then forced to make markets even when they didn't want to. Perhaps something like would work....but we still need a single place, auction type market location, IMO.
Good Discussion, very interesting to hear a good debate rather than the repeat of nonsene here on the board.
Don
I agree on the single place for bids and offers to meet, but it doesn't have to be a slow manual/specialist system, it can be a fast, all electronic system.
I suppose pestilence and calamity will strike if the markets go all electronic (oops, I forgot, they already are all electronic in Europe) - well, so much for that theory.
No price improvement, and small size. With the pricing structure the way it is, our traders save a fortune by trading 2K-5K shares at a time. It seems that whenever there is something happening, the (not so good) Speicialists cut back the NX quote to 1 x 1 anyway.
Earl used to trade Nokia as well, he spoke highly of the Specialist too.
Have a good one!!
Don
Quote from Tea:
I agree on the single place for bids and offers to meet, but it doesn't have to be a slow manual/specialist system, it can be a fast, all electronic system.
I suppose pestilence and calamity will strike if the markets go all electronic (oops, I forgot, they already are all electronic in Europe) - well, so much for that theory.
LOL...
The last time I checked, I was trading electronically with the Specialist, and he with me.....(but I know what you mean). How many people, firms, etc. are willing take the risk of being "forced" to trade...that is my primary point in all this. Either trade, or stop the stocks from trading....until things sort themselves out...when there is a major event in the stock/or market.
Don
Rhetorical question: Wasn't a specialist system already in place? If it didn't help then...
Quote from Don Bright:
I appreciate your comment, and I, too, am a fan of free markets, supply and demand, open competition and all the rest. But when I've seen the "no one home sign" on so many OTC traders, it makes me wonder a bit. Again, I feel that we need someone to match the orders and prices, and hopefully we will shake out the "bad apples" in the Specialist ranks, and bring in more "good guys."
I saw this same thing happen on the Options Floor. We were finally forced to make markets (My brother and I always did anyway), but the guys who waited around for the big "berries" were then forced to make markets even when they didn't want to. Perhaps something like would work....but we still need a single place, auction type market location, IMO.
Good Discussion, very interesting to hear a good debate rather than the repeat of nonsene here on the board.
Don
Don, you make it sound like the specialist provides some kind of casualty insurance. Let me ask you, is there some kind of hard and fast rule that requires a specialist to buy when the market's plummeting? If there is, then please correct me, but to my knowledge there is none and that's where the specialist as "buyer of last resort" argument falls apart.