The tide is turning for the specialists!!!

Yea, finally the Nasdaq will have a reality type market place ...

(Just another point of view)....

I just hope that we don't to an AOL/Time Warner merger where we took a $80 stock and a $60 stock and ended up with a $18 stock. (Translation: worst of both worlds).

I have always been vocal about my preference for a "single place"market, and yet we all trade electronically. Perhaps we will see something like this finally come about.

If the "lawyers" as opposed to the "traders" try to decide, God knows what we'll end up with. Having spent hours on the phone with regulator/lawyer types discussing the various nuances of complex trading markets, equities and derivatives, I have seen first hand that some major education needs to take place before we can expect to see a positive outcome for the American people and traders alike.

Ever optimistic, let's hope for the best....and keep the positive input heading in the right direction.

Don
 
Don, as always very good stuff from you on this.

I think that the specialist system should be retained .. you need faces to a system who take responsibility as specialists do how ever critics may complain about them. In this as in other things why are there always so many losers and plodders trying to reinvent the wheel? They don't know sh*t.
 
Let's continue with Price Improvement, which gives the Specialists a license to steal. Let's continue to live in the dark ages, and allow this elitist group continue to make healthy profits for their parent firms and themselves. Let's continue to wear the blindfold, gang !


NOT !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
 
Quote from hayman:

Let's continue with Price Improvement, which gives the Specialists a license to steal. Let's continue to live in the dark ages, and allow this elitist group continue to make healthy profits for their parent firms and themselves. Let's continue to wear the blindfold, gang !


NOT !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Well, just for discussion purposes. Without price improvement, which is an option on the NYSE (for those who like to not have the possibility of better pricing, they may simply use the NX function, of course, which gives them the bid or offer) there is simply a "pay this, sell at this" price, period...and no room for negotiation based on share size and other legitimate factors. How in the heck would a big institution be able to sell 100,000 shares at a single price...? 1,000 shares every nickel...not a good option.

As traders, we make money by providing liquidity, and looking for prcing inequities, and filling those inequities...(actually providing a service the investing public and to the institutions)...this function would become more difficult (not impossible, but more difficult) if we were to stray away from a single place market.

As I said before, let's learn the game, and play it to the best of our ability...it's much better than sitting on the sidelines yelling at the referees. We can work together to improve the system(s), but let's not bury ouselves in the meantime.

Just my thoughts...

Don
 
What is the sense in having an auction market if there is no oppurtunity for price improvement? Kind of kills the purpose. Part of the problem was the move to decimals based on some dubious theoretical resources. Grasso saw a coup in shotgunning the change as he did not believe the Nasdaq was ready.

We are left with a situation where we have "interpositioning" by the Specialist. What does this mean? He is improving price, but not enough or just enough to get Bogle pissed. surprised there has been no talk to going back to five cent increments?
 
Quote from Don Bright:

Well, just for discussion purposes. Without price improvement, which is an option on the NYSE (for those who like to not have the possibility of better pricing, they may simply use the NX function, of course, which gives them the bid or offer) there is simply a "pay this, sell at this" price, period...and no room for negotiation based on share size and other legitimate factors.
Don
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That is of course the problem. The bid ask spread is kept artificially wide so that people using the NX function get ripped off and the specialist (at his discretion) "gives" price improvement about 1/3(?) of the time. If the market were electronic like Nasdaq, the spread would probably always be what the spread is with price improvement.
 
Quote from Tea:

That is of course the problem. The bid ask spread is kept artificially wide so that people using the NX function get ripped off and the specialist (at his discretion) "gives" price improvement about 1/3(?) of the time. If the market were electronic like Nasdaq, the spread would probably always be what the spread is with price improvement.
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You have a valid point, and we are frightfully aware of stocks that keep artificially wide spreads, and avoid them. That is where the NY Open Book has helped us considerably. And since we try to keep our mid day trades in the 2,000-4,000 share range, the Specialist actually comes to us, rather than trying to avoid us. They seem to like the help.

We keep our automated and "black box" strategies moving the bids and offers based on formulas that don't allow for being "picked off" very easily...which is helpful as well.

Unless they actually do decide to merge, we'll probably never settle the Naz vs. Listed discussion to anyone's satisfaction. I prefer to simply put the onus on the trader and his/her own bottom line. If they're making good money and are satisfied, great...if not, then perhaps keep your mind open to other approaches. Heck I'll trade back on the chalk boards if there were an edge! LOL

Don
 
One moment from my days trading the NYSE comes to mind (of many)....

can't remember the symbol... but it's printing at xx.60 for 3 minutes with a bid at .58. Unsure about market direction and to see how he handles my order, I send a market order to sell my 400 shares (expecting .59 or maybe .58 if he doesn't want my shares). The second I send the order, he drops the bid to .50, prints my 400 at .51, puts the bid back at .58, and then starts printing .60 again.

A minute later, the stock runs straight up. My measly 400 shares at the low .09 out of the market. And through the bid!

Thank you sir.
 
Quote from FireWalker:

One moment from my days trading the NYSE comes to mind (of many)....

can't remember the symbol... but it's printing at xx.60 for 3 minutes with a bid at .58. Unsure about market direction and to see how he handles my order, I send a market order to sell my 400 shares (expecting .59 or maybe .58 if he doesn't want my shares). The second I send the order, he drops the bid to .50, prints my 400 at .51, puts the bid back at .58, and then starts printing .60 again.

A minute later, the stock runs straight up. My measly 400 shares at the low .09 out of the market. And through the bid!

Thank you sir.
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Look at the good side of it, someone may have gotten price improvement.
 
Quote from ratboy88:

Look at the good side of it, someone may have gotten price improvement.
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NYSE Price Improvement Policy: "We cheat the other guy and pass the savings on to you!"

:D
 
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