Is this fair? Is it common? I want to know.

Discussion in 'Order Execution' started by dpg2020, Jun 19, 2002.

  1. dpg2020


    I trade low-volatility, low volume NYSE stocks only. I use Interquote to follow the tick-by-tick activity. It also has a Level 2 screen which tells me who the buyers and sellers are and on what exchange. Because these stocks trade so little volume ie...20-30K shares per day, it's usually just me and the specialist. My question is this:

    If I'm selling stock and I'm the lowest price, with no other sellers, with my price being represented on the NYSE, is it legal for stock to sell at the same price as mine? This happens all the time. I don't understand how that could possibly be fair. Can the specialist sell his stock before me at the same price or are shares being traded on another exchange at that price and I'm just seeing the results of it. Thanks.
  2. search 'specialist.' you'll find a link to an article that descibes how specialists 'freeze the book' in order to ignore dot orders, as well as other tricks they play in order to favor the crowd.
  3. graeco

    graeco Guest

    What you describe happens to me all the time.Of course it is not fair but neither is life.Apparently the specialists can do any dam thing they want.When I want to buy a stock,I never hit on a specialist ask.They usually give me 10% of what I want and move the rest higher.
  4. chas, could you send me a link to this article?

    I've actually never had a problem with a specialist stepping in front of my order. Regardless, if your sure he's cutting in front of a retail order, this is bullshit and needs to be flagged. Whenever a specialist tries to fuck me, I usually call my broker and verify that they broke the rules, and then my broker calls NYSE to get whatever excuse they feel like giving. Then, I go to the SEC website and file a complaint naming that specialist as breaking exchange rules. Of course, I've never heard anything back from the SEC, but at least it's something. (The SEC is our government's version of the mafia, by the way, so don't expect anything from them). LOL - maybe you could call Elliot Spitzer. :D
  5. The public has priority over the specialist unless he offers lower or bids higher.Sometimes you might not get a fill at your price because perhaps the trade was done on an ECN,a regional exchange,a floor broker crossing stock(buy and sell)for his firm which would have priority over other orders entered before as long as he is crossing 25,000 shares or more,if i'm not mistaken,or maybe the specialist allocated stock to a floor broker instead of the DOT book.
  6. bRider -:D

    I don't bother to complain anymore...i've heard all the excuses. My favorite is, 'it was under a minute...' as if anything goes as long as it takes less than 60 seconds. I've even cut back on sending snippy emails to the specialists firms and the investor relations sites of the companies themselves. I'm tired of, 'can you cite a specific example?' That's the ultimate stonewall.

    I thought my sources told me you downloaded this already...

    Draft of article by Harold Bradley, of American Century Ventures. At the time he was head of equites trading at American Century Funds. ACV is an investor in ARCA.

    The article appeared in Trader Magazing, published by Thompson Financial, earlier this year.
  7. o, anyway, i don't think it's fair but i do think it's common.
  8. Rigel


    285,000 isolated cases.
    Really though, it's not a major problem.
  9. 285,001.
  10. In the situation cited by dpg, ie. he is lowest offer but doesn't get filled, how would you know you were lowest offer? I don't think the specialist is required to post his book. He could have 100k shares to go at your price. I suppose if you were offering 325 shares you could tell. If someone is ahead of you at the same price, does the specialist allocate or go by time priority?
    #10     Jun 19, 2002