challenging trading environment

Discussion in 'Prop Firms' started by captainkirk, Feb 21, 2002.

  1. Has anyone else noticed that the trading environment on the nyse has been very difficult within the last 3 weeks. It seems there is a lack of liquidity,fewer participants and nasdaq like manipulation. those that haven't could you please share the strategy name that is working for you such as pairs.
  2. We are using a lot more "enveloping" during the day (simply put, we keep bids and offers on our core stocks in away from the current market at all times)..this way we get past the NX and Decimal concerns, and get filled on the many pricing gaps.

    What you are seeing is, in a way, the Specialist's way of "going on strike" - in protest to the many NX orders being sent directly, etc. Don't worry, volatility is back, and that is more important..
  3. Eldredge


    I wish the specialists would go on strike for real and just have their clerks post all of the orders as they arrive :eek: .
  4. Bryan Roberts

    Bryan Roberts Guest

    good post Don!!! What i love is when the specialist put up ONE by ONE size, that way they don't have to trade either side and they freeze out the auto execution. we, as a community here on elite trader, should rank specialist based on fairness and integrity. i have a few nominations for worse specialist.
  5. ddefina


    I'll vote for DYN's specialist. After working with him/her, I decided to stick with NASD 99%. :)
  6. My friend spent some time on the NYSE floor on Tuesday (I was at the expo), and he spoke to several of the bigger specialists, and he came away with a feeling that they really don't like the NX at all (which makes sense), but also that they have been forced into even more fair executions due to the decimals and other ecns.

    My vote would go to something perhaps like switching to Nickel increments (even the the pennies have been better for pairs trading )....that way, the system would generate enough "small money" to keep the Specialists happy, while giving us good fills....(and, thanks Bryan).
  7. Eldredge



    Don't you think being the only one who can see the book should give the specialists enough of an edge to make a profit? What if you were the only one who could see the book, would you cry about small spreads or make a killing? I know they have a theoretical responsibility to provide an orderly market, but I just don't see them taking too much risk to provide that "orderly market". They slow down the fills, and take the opposite side when they have confidence that they can make a profit, but I don't believe they intentionally take a losing position to help the market.

    I just can't feel too sorry for the specialists. They have had an uneven playing field in a dirty game long enough. Decimals and ECNs have helped to clean it up, and I would hate to see a step backwards. Think of all the people who used to pay a few hundred dollars for an execution that would cost them a buck for the spread. I'll take transparency, equality, and fairness any day.
  8. Don't get me wrong, I certainly don't "feel sorry" for the Specialists. But remember, in 1987 we lost the bulk of the "old family" specialists in the "crash"...and they were replaced by big firms...and they do have a pretty tough might find it interesting to spend some time on the floor and really watch how these guys handle all the orders, without (many) mistakes...

    I am a fan of "free enterprise" and "open markets" - which I think will prevail.

    A much worse thing is happening (IMHO) on the NAZ with their "Super Montage" which is an attempt to suck all the orders back into the market makers hands. The ECN's have tried via legal means to block this, but they have not been pretty soon now, all your Island orders will go back to the NASD one form or another....I am waiting to see how this pans out!!

    So, back to work!!
  9. xicaju


    Can you give us some more details about this NASDAQ issue? I guess I am not up on my news. Perhaps a good news source I can check out for these type of issues.

  10. Here is some stuff, you might want to search under "super montage" on the web for more info:
    "..... But the others don't necessarily think so. Many of the objections raised by other ECNs relate to a more philosophical argument. The Nasdaq is still owned by the NASD, which regulates the ECNs through its regulatory arm, called NASDR. The other ECNs argue that this new execution system will present a conflict of interest because the same market that is collecting and selling the data is making the rules and competing for execution.

    "They have the ability to write the rules and profit from them by playing on the field as well," says Richard Schenkman, chief exec of The BRUT ECN. "That's problematic."

    Similarly, officials from the Archipelago ECN issued a statement following the proposed amendment Thursday that reiterates its opposition to the Super Montage. "The Super Montage - whether version one through eight - creates actual conflicts of interest that undermine competition."

    This is sort of the tone that I have encountered (this is a mild quote actually)....anyway, this should give you an idea of what I am speaking about.
    #10     Feb 22, 2002