their edges are bullshit....
What a specialist knows about YOU
- Thread starter Option Trader
- Start date
their edges are bullshit....
Your pint is that the broker himself may be a bigger opponent than the specialist. Please elaborate, and if you mean the same regarding NYSE stocks.
Good point. Please be more specific about who these players are who buy the order flow, and how such parties may trade against the customer.
Once already the specialist offers such services (i.e. prime brokerage services), you will definitely find institutionals interested in shorting the stock taking advantage of the specialist being in charge of the bid & ask, & that the specialist has personal incentive to get an even better result.Quote from Landis82:
Why not just BLAME the company.
They are the one's that employ the NYSE specialist in the first place.
Quote from trendo:
Players have 19-21. Dealer makes 18. Isn't that the situation you described? The hand is over and the players get paid. Period. End of story.
This was Bill Cara's original quote
{Would any casino player play 21 (blackjack) if the dealer's knowledge of all the cards on the table was a rule of the house? Would anybody play poker if one of the players knew in advance everybody's cards and how they would play them (and was the banker)?}
As far as I know there is no such Casino so this was just a hypothetical to describe the way Brokerage houses use customer information to their advantage. When considering the hypothetical you need to look at the fictional Casino-Algor which employs both a an algorithm based on knowledge of the cards combined with the statistical edge inherent in blackjack and ask whether it will make more money by hitting an 18 hand when it's in a situation where doing such carries no risk (thus an additional edge).
....and how does the trader get hurt by this?
You might find the best stock in the world, with a great edge, but because you bought too many shares at the exepense of the specialist, the stock will turn against you.
Mate you are so off the mark futures dont have MM and with over a 1mill lots traded a day (in the ES mini for example) you dont need liquidity providers. The guy that used to sit next to me would do business for a big hedge fund and could easily do 50k lots a day throwing 2-3k clips at a time as part of some strat the trader was running which appeared from the outside a mean reversion strat though he never told us. Stops get run its a fact of life