Interesting link for anyone that wants to see how SuperMontage (coming in July) will revolutionize Nasdaq....http://nasdaqtrader.com/trader/hottopics/smflash/smmain.stm
SuperMontage
- Thread starter Vinny1
- Start date
The proposed SuperMontage system will allow Market
Makers to display both attributable and non-attributable
quotes. The Market Maker name (MMID) will be displayed
next to attributable orders. An anonymous ID named "SIZE"
will be displayed next to non-attributable orders.
Currently most MMs use ECNs in order to work orders
anonymously. They can move volume through an ECN while
keeping their identity a secret. MMs also play their
typical games of posting on one side of the market while
collecting/distributing on the other via an ECN.
It appears that the SuperMontage proposal will reduce
this volume that is sent to the ECNs. Coupled with the
fact that an MM will not have to pay ECNs fees to
perform an anonymous trade. I expect that this will
significantly reduce volume and liquidity on ECNs.
This fundamentally is bad for day traders who normally
strongly prefer using ECNs.
Many folks view the Nasdaq SuperMontage system targets
putting ECNs out of business while increasing the volume
traded across a more closed Nasdaq system. The usage of
non-attributable orders that actually reduce market
transparency tend to support this train of thought.
Do any folks have exact figures on how much of each ECNs
volume is derived from MMs? This will provide everyone
with a better idea of the impact when SuperMontage is
implemented.
- Greg
Makers to display both attributable and non-attributable
quotes. The Market Maker name (MMID) will be displayed
next to attributable orders. An anonymous ID named "SIZE"
will be displayed next to non-attributable orders.
Currently most MMs use ECNs in order to work orders
anonymously. They can move volume through an ECN while
keeping their identity a secret. MMs also play their
typical games of posting on one side of the market while
collecting/distributing on the other via an ECN.
It appears that the SuperMontage proposal will reduce
this volume that is sent to the ECNs. Coupled with the
fact that an MM will not have to pay ECNs fees to
perform an anonymous trade. I expect that this will
significantly reduce volume and liquidity on ECNs.
This fundamentally is bad for day traders who normally
strongly prefer using ECNs.
Many folks view the Nasdaq SuperMontage system targets
putting ECNs out of business while increasing the volume
traded across a more closed Nasdaq system. The usage of
non-attributable orders that actually reduce market
transparency tend to support this train of thought.
Do any folks have exact figures on how much of each ECNs
volume is derived from MMs? This will provide everyone
with a better idea of the impact when SuperMontage is
implemented.
- Greg
This is only slightly better than the sorry Primex fiasco played out on the IB thread. Nasdaq is desperately trying to turn the clock back to those wonderful days when all spreads were at least 1/2 and you couldn't post a bid or offer and if you did, it would just be ignored(kind of like what happens on the options exchanges now). Guess they want to get back some of the billion dollars they were fined for antitrust violations. I wonder why we all don't just say to hell with Nasdaq and NYSE and trade the globex, the eurex and the currencies where we get a semblance of a fair market.
Magna
Administrator
Although there was no fee attached to SuperSOES orders when first instituted, that has unfortunately all changed. Every order is now charged .10 per order, .002 per share filled (almost as much as ISLD), and .25 per cancel.
They give ya SuperSOES, a major improvement over SOES (for NMS stocks), get ya used to how fast it is, then they sneak in a bunch of charges.
As with all things, SuperMontage is just something we will have to learn to adapt to... stuff like SuperMontage may be a drawback for trigger-happy Nasdaq scalping, but shouldn't fundamentally change intermediate scalping or trading with charts... moreover, swing trading will obviously remain unaffected.
The new rules and market structure are there to kill off the market makers' competition from daytraders for very near term price movements... I personally have never bothered to compete in the ultra-short term scalping environment... for most intraday strategies, there is little that the Nasdaq or SEC can do to hinder our success, unless of course the bast*ds decide to ban daytrading altogether.
The new rules and market structure are there to kill off the market makers' competition from daytraders for very near term price movements... I personally have never bothered to compete in the ultra-short term scalping environment... for most intraday strategies, there is little that the Nasdaq or SEC can do to hinder our success, unless of course the bast*ds decide to ban daytrading altogether.
Interesting to me was the "fee consideration" order option.
Would ECNs show up as charging a fee, and MMs not, thereby sending those orders to the MMs instead of the ECN when at the same price? Getting on the same side as MLCO strategy is dead -when it will be showing as SIZE instead..
Maybe all the ECNs should just leave Nasdaq like ISLD and get together and do their own thing, they can cancel their fees while they are at it, and make their money off prop trading. Oh, and hire all of us to trade for them at 99% payout!
Would ECNs show up as charging a fee, and MMs not, thereby sending those orders to the MMs instead of the ECN when at the same price? Getting on the same side as MLCO strategy is dead -when it will be showing as SIZE instead..
Maybe all the ECNs should just leave Nasdaq like ISLD and get together and do their own thing, they can cancel their fees while they are at it, and make their money off prop trading. Oh, and hire all of us to trade for them at 99% payout!