Why NYSE?
- Thread starter esc_trader
- Start date
Why not just take the offer if buying and whack the bid if selling? I agree, on the NYSE, it may be too late using IB TWS, but on QQQ's on Nasdaq, what's the point?
This is an actual question - I really don't know of any advantage, and since I don't trade the Q's, I don't know if sometimes the only way to get in to them when there is a lot of momentum is with a market order?
nitro
Well put Robert Tharp. Most of the price improvement is having your 1000 share or less order matched with large institutional orders at a "centralized" market place. Does the specialist sometimes Bid or Offer .01 ahead of you? Sure, but if you do trade
NYSE you will get noticeable price improvement many times. If you
trade NYSE, I would suggest you have ROUTES NYSE,NYSE NX and
ISLD. You will have the speed of ISLD and NYSE NX and NYSE-for
potential price improvement.
One note on ISLD-ISLD is just about the only ECN that is not Pro-active(seeks other ECN's or MM if there is no match at price).
Traders can exploit this by offering above or buying below NBBO on many stocks, including NYSE. ISLD does not accept MKT orders.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
NYSE you will get noticeable price improvement many times. If you
trade NYSE, I would suggest you have ROUTES NYSE,NYSE NX and
ISLD. You will have the speed of ISLD and NYSE NX and NYSE-for
potential price improvement.
One note on ISLD-ISLD is just about the only ECN that is not Pro-active(seeks other ECN's or MM if there is no match at price).
Traders can exploit this by offering above or buying below NBBO on many stocks, including NYSE. ISLD does not accept MKT orders.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
I have had the _EXACT_ experience that you have had with IB TWS on the NYSE - I had days where I was the best bid or offer throughout the day, on different stocks, and I would never show up as either. At this time, I always routed directly to the NYSE instead of BEST.
I have also had more than two data feeds for a long time, and was looking for my bid/offer on the time/sales on the second feed to see if it was that TWS quotes were slow, etc, but they never showed up on any data feed.
After months of this, I finally got really burned one day, and I called IB, and insisted that one of them stayed on the line with me while I "proved" to them what was going on. He couldn't understand it either and he said he would look into it.
A few days later he came back, after supposedly talking to the specialist (or some representative talked to him/her) and the response was that he was way too busy to update the bid/ask.
Well, I do not know what to think ,because this happens on almost _EVERY_ stock that I trade, and that is a _LONG_ list, so I was totally dissatisfied.
I have learned to live with it becasue to me the specialist is awesome to me most of the time - just don't seem to be able to be the best bid/offer, and sometimes, no matter what I did, I simply could not get out _EVEN_ if I put in a limit order several points above/below that ask/bid!!
In response to RTHARP, I believe what you are saying 100%. I just do not know (and wished I knew) what the difference between the way you connect to the NYSE and the way IB's TWS connects.
nitro
I have been focusing on trading NYSE stocks for the past month and a half and I use IB's TWS platform and have never had a problem with having my bids/offers reflected. It usually takes a couple of seconds, but that's standard for the NYSE. When it takes longer, usually something is going on like a print is going to go up, or there are multiple small retail orders trying to penny the bid/ask like me.
Just an idea - If you are trying to short the stock and it just traded at the ask the specialist cannot show your offer at a lower price due to the uptick rule. Not sure if that's the case, but thought I would mention it...
DeeMan
Just an idea - If you are trying to short the stock and it just traded at the ask the specialist cannot show your offer at a lower price due to the uptick rule. Not sure if that's the case, but thought I would mention it...
DeeMan
The whole 'price improvement' thing is a lot of nonsense. It's another way of saying that NYSE doesn't show real bid/ask prices.
The real issue is, what is the cost of doing a round trip (ignoring commissions.) That cost will be equal to the average spread. If you were to take all the issues for which the price * volume is above a certain amount (or whatever other criteria you use to determine what is a tradable security,) you checked the average spread for those issues (the real spread, the difference between the bid and ask price that you can actually get) and you determined that NYSE has a lower average spread (in terms of percentage of the price) then you might actually have a useful bit of information. The possibility of buying something for less than the advertised price usually isn't worth getting excited about. Not in the case of used cars, not in the case of clothing bought during 50% off sales, and not when it comes to shares of stock.
Of course then you would have to look at other aspects of trading, like risk, potential profit etc. to see which is better, NASDAQ or NYSE. And this would be from the trader's perspective.
Being a (wannabe) programmer I always disliked NYSE for a different reason. This is the 21st century. Using pen, paper, hand signals, thousands of people working on a single floor - all this to achieve something that a small network of computers could do at a fraction of the cost is simply distasteful. It also clearly shows that the stock market doesn't operate within the same set of rules that apply in truly free, competitive markets. This sort of potential cost saving would have been realized a long time ago in any other industry.
voodoo
The real issue is, what is the cost of doing a round trip (ignoring commissions.) That cost will be equal to the average spread. If you were to take all the issues for which the price * volume is above a certain amount (or whatever other criteria you use to determine what is a tradable security,) you checked the average spread for those issues (the real spread, the difference between the bid and ask price that you can actually get) and you determined that NYSE has a lower average spread (in terms of percentage of the price) then you might actually have a useful bit of information. The possibility of buying something for less than the advertised price usually isn't worth getting excited about. Not in the case of used cars, not in the case of clothing bought during 50% off sales, and not when it comes to shares of stock.
Of course then you would have to look at other aspects of trading, like risk, potential profit etc. to see which is better, NASDAQ or NYSE. And this would be from the trader's perspective.
Being a (wannabe) programmer I always disliked NYSE for a different reason. This is the 21st century. Using pen, paper, hand signals, thousands of people working on a single floor - all this to achieve something that a small network of computers could do at a fraction of the cost is simply distasteful. It also clearly shows that the stock market doesn't operate within the same set of rules that apply in truly free, competitive markets. This sort of potential cost saving would have been realized a long time ago in any other industry.
voodoo
I am sure most people understand that the price improvement versus what the real market should be debate is tough to analyse. Who knows how to quantify liquidity, fills, fairness, timeliness, transparency, and costs.
But when the market was really moving I would say that a large portion of my profits came from getting 40 to 80 or more cent pops in stocks like emc and aol. If you really knew the book you could predict when the stock was set up to pop, then when the specialist spread the market you knew to just give em the stock and make serious money. You could even throw out some shorts on certain types of spreads to the upside.
That was why trading the nyse was great. Now, the game is much harder. I agree with some of the criticism although not all of it. Who wants to deal with an artificially wide spread in a dead market. Many times I do not want to play games with the specialist b/c the risk is too high.
That is why I am starting to trade nasdaq. It too has it share of drawbacks. By the way my prop/pro firm has what must be full blown Real Tick b/c we even have the Tony Oz scans-- which I do use to find short term trades. However, there seems to be a rhythm for when those scans are real effective.
There really should not be much debate on this subject It seems to me NYSE can be a better market for most (not all) scalpers because you can trade many of the stocks with tight mental stops and and you can be in and frequently correct from your entry. As a whole NYSE stocks do not seem to be nearly as jitery as Nasdaq. Consequently, being correct on a trade from the start makes for much better decision making and less stressful scalping. That lack of intitial drawdown makes for more winners and easier scalping. It can even make for easier swing trading as I have had nyse stocks go down 3/4 of a point or more without the offer ever being taken out.
However, right now most of the Nyse suffers from a lack of range and that makes some of the Nasdaq stocks look really interesting if you have the discipline to not overtrade em. Now once you get to an organized system with volitility based stops or wide stops you probably begin to favor the Nasdaq because of the volitility. Whatever works.
But when the market was really moving I would say that a large portion of my profits came from getting 40 to 80 or more cent pops in stocks like emc and aol. If you really knew the book you could predict when the stock was set up to pop, then when the specialist spread the market you knew to just give em the stock and make serious money. You could even throw out some shorts on certain types of spreads to the upside.
That was why trading the nyse was great. Now, the game is much harder. I agree with some of the criticism although not all of it. Who wants to deal with an artificially wide spread in a dead market. Many times I do not want to play games with the specialist b/c the risk is too high.
That is why I am starting to trade nasdaq. It too has it share of drawbacks. By the way my prop/pro firm has what must be full blown Real Tick b/c we even have the Tony Oz scans-- which I do use to find short term trades. However, there seems to be a rhythm for when those scans are real effective.
There really should not be much debate on this subject It seems to me NYSE can be a better market for most (not all) scalpers because you can trade many of the stocks with tight mental stops and and you can be in and frequently correct from your entry. As a whole NYSE stocks do not seem to be nearly as jitery as Nasdaq. Consequently, being correct on a trade from the start makes for much better decision making and less stressful scalping. That lack of intitial drawdown makes for more winners and easier scalping. It can even make for easier swing trading as I have had nyse stocks go down 3/4 of a point or more without the offer ever being taken out.
However, right now most of the Nyse suffers from a lack of range and that makes some of the Nasdaq stocks look really interesting if you have the discipline to not overtrade em. Now once you get to an organized system with volitility based stops or wide stops you probably begin to favor the Nasdaq because of the volitility. Whatever works.