Hey NYSE: STOP "pennying me to death"!

Pennies are fine. Tighter spreads mean (in general), better prices for both buyers and sellers. But because it's more difficult to see market depth, the NYSE needs to provide a Level II type view.

 

its called open book, and it, like level 2, are like tits on a bull (useless), imo...

depends on the scenario of getting pennied... if i am cutting the spread and scalping, esp during slow time, that is specialist being territorial and i see it as the competition/nature of the biz (you expect him just to roll out the red carpet when you try and scalp his spread) and dont mind it as much, but i hate it when they go to print a larger order away form market and you get pennied, or when they penny you several times, and some of the games they play with become annoying too...

 

Pennies are fine. Tighter spreads mean (in general), better prices for both buyers and sellers.

Pennies sound good , but many times the .01 spreads let the Specialist jump a head of your order, or post a .01 Bid Or Offer, that has no depth. .01 spreads make it much harder to day trade profitably. It used to be when I was right and made 4 ticks on a trade 1000 share trade I made $500(1000 X .125 X 4).
The Bid Asked spread became .0625 and on four ticks on 1000 shares I made $250(1000 X .0625 X 4). Now when I trade, if I'm right on four ticks I make $40(1000 X .01 X 4). I can't even afford
to take friends out for lunch on Wall Street! Times have changed, so we must adjust our trading.



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

 

who is sitting there thinking, hmm, where can I move this "trading" thread to?? Who has the time to make these highly important decisions?

This thread is about "TRADING", not order execution, and I object to this thread being moved.

 

Maybe it has to do with the corporate sponsorship on the top of the page.

 

in <a href ="http://{speculations}.blogspot.com/"><i><font size=1>{Speculations}</font></i></a>, i argue that pennies create friction and/or tax the market. (scroll down).

 

great analogy so here it is:

Picture this scene with me.


It’s an art auction. The auctioneer is at the podium. He describes a Monet. “We will start the bidding,” he declares, at $25,000. Do I have $26?”


“I’ll bid 25 thousand and 10 dollahs” shouts someone from the back.
“Twenty five thousand and twenty dollars!” comes another call.
“Twenty five thousand and 30!” still another.
“40!” wails the first bidder.
“Fifty!” hollers another.
.
.
.
Finally, an aggressive buyer steps up. “26 thousand dollars,” he bids.
“Twenty six thousand and 10 dollars” counters another.



Is this getting frustrating to read?


Now you know what it’s like to trade in decimals.


If the efficiency of an auction market is partly determined by the minimization of frivolous bids, then decimals hinder efficiency. Decimals are an invitation to market obstruction.


Is this a true auction market? It might better be described as a market within a market. What the boiler room guys used to call 'insides.' Pennies are used to nullify bona fide bids and offers, buying time for the specialists and his partners in crime, the floor traders, to trade ahead of you with a complete knowledge of the market at that moment.


As one trader said, "I didn't know pennies would be so expensive." Lately it seems like an auction in name only.

my only criticism is your reference to decimals....i love decimals, i just hate one cent increments, i.e. PENNIES!!!!

 

thank you, C. I'll grant you, the same obstruction can be found with 1/64 ths, 1/128 ths, etc.

In fact, things might have been really ridiculous if the increments were smaller than pennies.

 

I agree with the above for a manual market. However, given today's technology and literally tens of thousand potential buyers and sellers at any given moment, the "friction" as described above, should be measured in fractions of a seconds. Of course the NYSE is not truly electronic - perhaps one day they'll adapt accordingly.

 

def:

the issue is that these tiny increments are used to hinder the job of a market: efficient exchange of private property. The tiny increments/decriments are being used to mask what the true market is, thereby making for lots of frivolous trades at best and, at worst, perpetrating fraud.

This trick can be used effectively on NX as well as on DOT.