What are the advantages of trading listed stocks over nasdaq? Everything I've read states that the executions are slow on listed stocks vs nasdaq stocks, thats why daytraders supposedly like the nasdaq/ecn executions. Are there specific strategies the pro traders use when trading the open on the New York, that benefits trading listed stocks?
Trading listed vs Nasdaq
- Thread starter Honda
- Start date
Hi Honda,
Opening only orders are a popular strategy at some firms. They only work on the NYSE, however, where the supply and demand is regulated by one person (versus many MMs). The idea is to go "with" the specialist and trade in the direction of the specialist's inventory in the stock--buying openings that are "too low" and selling openings that are "too high"...hoping for the specialist to close the gap--at least slightly.
JD
Opening only orders are a popular strategy at some firms. They only work on the NYSE, however, where the supply and demand is regulated by one person (versus many MMs). The idea is to go "with" the specialist and trade in the direction of the specialist's inventory in the stock--buying openings that are "too low" and selling openings that are "too high"...hoping for the specialist to close the gap--at least slightly.
JD
I've read on many other threads that many prop. firms almost insist on trading listed instead of Nasdaq. My impression also was that most daytraders trade Nasdaq.
Given the speed advantage w/ECN's and click-and-you've-bought-it software, I too would like to know why trading listed stocks is preferred by so many traders. Isn't it harder to get out of a dropping listed stock than a Nasdaq stock?
Given the speed advantage w/ECN's and click-and-you've-bought-it software, I too would like to know why trading listed stocks is preferred by so many traders. Isn't it harder to get out of a dropping listed stock than a Nasdaq stock?
First I want to premise this by saying that I traded NASDAQ 4 years ago so I assume much has changed since then re: order execution. I trade exclusively listed stocks and am consistenly profitable with it. There are several reasons why I and I assume other daytraders like trading NYSE issues. So here goes...
1. You are able to move size better in NYSE. It does'nt affect me as much because I am a 500-1500 per share trader. But there are traders in these prop firms that need or want to move 5000 shares at a time and they appreciate the fact that their slippage would only be about 10-15 cents.
2. You can participate with the specialist on the "clean up" prints. Let us say market of XYZ is 33.50 /33.60 5000 by 8000 shares.
Depending of market conditions, one can put in an order to sell 500 shares at 33.62, 500 shares at 33.65 and can get filled at 33.75 on ALL 1000 shares if a big mutual fund puts in a buy 500,000 share with their $2 broker. During fast market conditions it happens A LOT. Most of my big days were a result of 70% ability and 30% price improvements. I could be wrong but I don't think that happens a lot trading OTC.Can someone please verify?
3. Most important reason why I personally (no counterpoint emails please.. I said personally) is that NYSE stocks have enough range but not as much intraday "jiggles" partly attibutable to the centralized market structure as opposed to the fragmented nature of NASDAQ. PERSONALLY, it is far easier to discern trend because there is only 1 AXE and he does'nt change.
I trade this NYSE stock and make money 90% of the time except for 5 straight days 7 months ago. I lost $ 5 straight days! You know why? He was on vacation. Geez, I hope he doesn't retire.. else I need to find new stock. Get my point?
Hope this helps.
1. You are able to move size better in NYSE. It does'nt affect me as much because I am a 500-1500 per share trader. But there are traders in these prop firms that need or want to move 5000 shares at a time and they appreciate the fact that their slippage would only be about 10-15 cents.
2. You can participate with the specialist on the "clean up" prints. Let us say market of XYZ is 33.50 /33.60 5000 by 8000 shares.
Depending of market conditions, one can put in an order to sell 500 shares at 33.62, 500 shares at 33.65 and can get filled at 33.75 on ALL 1000 shares if a big mutual fund puts in a buy 500,000 share with their $2 broker. During fast market conditions it happens A LOT. Most of my big days were a result of 70% ability and 30% price improvements. I could be wrong but I don't think that happens a lot trading OTC.Can someone please verify?
3. Most important reason why I personally (no counterpoint emails please.. I said personally) is that NYSE stocks have enough range but not as much intraday "jiggles" partly attibutable to the centralized market structure as opposed to the fragmented nature of NASDAQ. PERSONALLY, it is far easier to discern trend because there is only 1 AXE and he does'nt change.
I trade this NYSE stock and make money 90% of the time except for 5 straight days 7 months ago. I lost $ 5 straight days! You know why? He was on vacation. Geez, I hope he doesn't retire.. else I need to find new stock. Get my point?
Hope this helps.
LOL, this is not the first time I hear this story. Got to keep track of his personal life
I am a Nasdaq trader, but I will trade NYSE once in a while as well. I will be the first to admit that they are two different animals. As I mentioned before, I was trading NYSE exclusively before SOES got popular. Anyhow, trade what you are comfortable with and able to turn a profit
Tony , I agree with you that NYSE and NASDAQ are really two
different markets. If you trade NASDAQ and you start trading NYSE
stocks, it seems like you are getting filled in "slow motion". I would suggest traders trade either NYSE or NASDAQ, not both . If
you use an ECN to trade NYSE, you may be gaining speed but giving up potential price improvement.
NYSE specialist system offers price improvment , liquidity and depth of the specialist book. We don't tell traders to trade one market or the other, but the most profitable traders at our firm seem to trade NYSE stocks. I know Tony has been very successful trading NASDAQ , but our NYSE traders seem to be doing better this year in these "choppy" markets . Don Bright and others say only trade NYSE , because of the advantages of the specialist system. I would say trade what you feel comfortable with.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
different markets. If you trade NASDAQ and you start trading NYSE
stocks, it seems like you are getting filled in "slow motion". I would suggest traders trade either NYSE or NASDAQ, not both . If
you use an ECN to trade NYSE, you may be gaining speed but giving up potential price improvement.
NYSE specialist system offers price improvment , liquidity and depth of the specialist book. We don't tell traders to trade one market or the other, but the most profitable traders at our firm seem to trade NYSE stocks. I know Tony has been very successful trading NASDAQ , but our NYSE traders seem to be doing better this year in these "choppy" markets . Don Bright and others say only trade NYSE , because of the advantages of the specialist system. I would say trade what you feel comfortable with.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Here is a link to an excellent Forbes magazine article about the ongoing manipulation of the Nasdaq. A little bit dated but I doubt much has changed.
http://www.tradevision.com/Training/Fun_games.htm
http://www.tradevision.com/Training/Fun_games.htm
Man, I LOVE this site and the distinguished traders who frequent and post on it!
GATrader, thanks for your post. But what about exit speed? Isn't it faster getting out of a falling stock with NASD stocks? With ECN's and stuff you can easily go out of market and hit an outside bid - just click and you're gone (unless someone beats you to it). Doesn't it take longer with the specialist?
Thanks!
GATrader, thanks for your post. But what about exit speed? Isn't it faster getting out of a falling stock with NASD stocks? With ECN's and stuff you can easily go out of market and hit an outside bid - just click and you're gone (unless someone beats you to it). Doesn't it take longer with the specialist?
Thanks!
Again, I have no experience with NASDAQ regarding getting out of a stock. I would assume it would be instantaneous if you submit an order outside the market.
Under normal conditions at the NYSE, I load and submit a price about 5 cents worse for me and I usually get a filled at or around the price I need to get out. The fill takes about 5-10 seconds. It sometimes gets hairy during fast market conditions wherein the specialist is processing a huge amount of orders-usually around major points (round figures, support/resistance/cleanup points).
Around those points I know specialist will be busy so I enter a market and hope for the best. Ex XYZ is 99.95/100.00. If I am short and it starts printing 100.00 I cover short at market-I might get filled at 100.10 or sometimes 99.90 because the next order in the queue of the DOT is a big sell order. Of course that only happens 10-20% of the time but I'll take it. Just remember this "delay" vs. NASDAQ is a double edged sword. Sometimes you want to buy something and the SP turns over, giving you the chance to cancel the order.
Bottom line. The pros and cons of NYSE execution, (while admittedly slower by 2-10 seconds over NASDAQ ) tend to cancel each other out given a huge amount of sample size ( I trade between 70-100 times a day) which means that trend identification, money management and discipline will be, at the end of the day,month, year, career will be the main determinant of your success.
Hope this helps.
Under normal conditions at the NYSE, I load and submit a price about 5 cents worse for me and I usually get a filled at or around the price I need to get out. The fill takes about 5-10 seconds. It sometimes gets hairy during fast market conditions wherein the specialist is processing a huge amount of orders-usually around major points (round figures, support/resistance/cleanup points).
Around those points I know specialist will be busy so I enter a market and hope for the best. Ex XYZ is 99.95/100.00. If I am short and it starts printing 100.00 I cover short at market-I might get filled at 100.10 or sometimes 99.90 because the next order in the queue of the DOT is a big sell order. Of course that only happens 10-20% of the time but I'll take it. Just remember this "delay" vs. NASDAQ is a double edged sword. Sometimes you want to buy something and the SP turns over, giving you the chance to cancel the order.
Bottom line. The pros and cons of NYSE execution, (while admittedly slower by 2-10 seconds over NASDAQ ) tend to cancel each other out given a huge amount of sample size ( I trade between 70-100 times a day) which means that trend identification, money management and discipline will be, at the end of the day,month, year, career will be the main determinant of your success.
Hope this helps.