Turn the NYSE into an ECN

I've never really seen much value in the "price improvement" at the NYSE. If the market is moving in my favor I get a slightly better price; this is not much different than entering an order slightly further away from the bid/ask. With just a little bit of tape skill, you can achieve the same effect on isld or globex.
 
Just a note. If you trade with the NYSE specialist , you will get price improvement, some of the time. For small orders(1099 or less) , you should use NYSE NX. While NYSE NX is not a true auto--ex, you will a fast execution and a potential for price improvement. If you trade NASADQ markets, you will probably not like NYSE executions, it's like trading in slow motion. However, the depth and liquidity of NYSE markets, might make up for the slower execution. If you want a fast execution on an NYSE stocks, trade with an ECN. Most large traders who trade NYSE stocks with us , use the NYSE specialist for 2000+ shares. The original
subject of the thread was "should the NYSE be an ECN." The NYSE has lost market share to ECN's and the regional markets, but politically Dick Grasso(NYSE President) is politically savy
and he is helping to keep market share.

Gene Weissman
E-Brokerage, LLC
gene@ebrk.com
 
Quote from Gene Weissman:

The NYSE has lost market share to ECN's and the regional markets, but politically Dick Grasso(NYSE President) is politically savy
and he is helping to keep market share.

Gene Weissman
E-Brokerage, LLC
gene@ebrk.com
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Dick is done--unless he has the guts to piss off his constituency and do things like 20 millisecond Direct+ orders, instant cancels, etc... 90% of traders couldn't give a damn about the "benefits" the NYSE purports to offer. All the majority wants is a system that minimizes the specialist's latitude to #&%$% your mama.
 
MaxGain,

In some ways I agree with you, but the NYSE is still the premier market to be lsited on worldwide . Hedge Funds and large orders go to the NYSE floor most of the time(say70% of the order flow). From my prospective as a day trader, I trade many small NYSE orders on ECN's. The NYSE NX(direct) is a valuable alternative to ECN's(if any rule changes don't hurt the little guy).



Gene Weissman
E-Brokerage, LLC
gene@rbrk.com
 
Quote from Lobster:

The real question is: How can we replace the specialist by a computer program, which would be objective, fair, and not greedy?

I'm thinking Why can't a computer provide price improvement?

Here are two ideas. Please feel free to comment.

Method 1:

There is only one print every 15 seconds (or as soon as a certain number of shares have been entered as orders). Each print matches all the limit orders that can be matched plus all market orders at one and the same price. It would be kind of like an opening print every 15 seconds and no other prints. This could be programmed easily and would eliminate the specialist while providing a reward for adding liquidity (other than the miniscule ECN rebates).

Method 2:

Similar to method one, but on a per-user-basis: It would work like a regular ECN (ISLD, Globex, etc.), but if a participant sends in a large marketable order, all the orders he takes out get price improvement accordingly (like it was supposed to be on the NYSE until a few weeks ago). A slight difficulty with this method would be that we would have to make it illegal (or even better impossible) for someone to circumvent this rule by submitting several small orders instead of the big one. My first thought would be that if he sends more than one marketable order within 15 seconds (or whatever time will prove to be reasonable), then the system will amend the prices on all orders except the last one to accurately reflect the fact that it was really one big marketable order sent in several chunks. But of course this rule should not work against the price taker too excessively, so I we should make sure that in no case prices be amended under this rule more than 15 seconds (or whatever time we set for this rule) after the original execution.

So, how about all this?
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Lobster, I'm glad to see that there are some people on ET with the brains to think analytically.

Unfortunately, Idea #1 violates the "open auction" marketplace that defines the NYSE. I think other foreign exchanges do a similar thing where they group orders together and execute at certain times, but it won't ever fly on the NYSE.

Don't forget, most companies choose where to list there shares. The NYSE is the exchange of "stability." I don't think these ideas would ever fly there.
 
Quote from NYSE Trader:

I don't understand all this complaining re specialist's tricks...if you keep getting taken by a specialist then don't trade with him or even their firm if their style comes from the top down. do your homework. trade with different specs till you find one that you can make money with. or do this as an experiment: trade with an amex specialist for a couple days...after the pain of that experience you'll come away with a very different view of the nyse system.
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I couldn't agree more with the sentiment of this post. Too many people on ET bitch about everything.

If you view something as unfair, don't trade it plain and simple. There are 7000 stocks and you choose to trade with shady specialists, well looks like you're the fool then.
 
well, the specialist should not be allowed to play tricks. the SEC is full of shit b/c they don't go after the big guys. only recently have they gone after big firms & that was b/c D.A. Spitzer was able to successfuly exthort money from them, so the SEC wanted a piece.

If the D.A. really gave a shit about the small investor who was getting screwed they would give him 95% of the $1.2 billion dollar settlement instead of stuffing their pockets. This is yet another example of the gov. finding a way to remove money from people's wallets.
 
Quote from GHansen:

Looks like the NYSE may becoming more ECN-like after all. www.traderbulletin.com reports that the NYSE is moving to automatic quoting. Not sure if this means automatic cancels too. Hope so!
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Well, well, well....Looks like the chickens come home to roost!


:) BMW
 
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