Limit-NX feature on NYSE stocks kills volatility

Discussion in 'Order Execution' started by Ace_Rothstein, Apr 27, 2002.

  1. InyOutty

    InyOutty


    Trade_Cents,

    That doesn't mean the specialist can't participate in the offer. He can take up to 1/2 the offer size once it is "tripped," subject to few restrictions.

    Rule 104 (b):

    ...the purchasing of stock on a direct plus tick or a zero plus tick should be effected in conjunction with the specialist's re-entry in the market on the opposite side of the market from the liquidating transaction where the imbalance of supply and demand indicates that immediately succeeding transactions may result in...a higher price (following the specialist's purchase of stock on a direct plus tick or a zero plus tick).

    Translation: The specialist can "reload" at the bottom to provide liquidity for the ensuing rebound.

    Specialist do this routinely and make a lot of money from it.
     
    #21     Apr 28, 2002
  2. InyOutty

    InyOutty



    lescor,

    This happens primarily because other ITS participants (CHX, Boston, etc.) "block" the NX print by bidding above the NYSE bid (when you are trying to sell) or offering below the NYSE offer (when you are trying to buy). The other potential reason is that the specialist freezes the book due to an imbalance.
     
    #22     Apr 28, 2002
  3. lescor

    lescor

    I never route to other exchanges and don't use a 'best price' execution route, so how could the actions on other exchanges matter? I've seen it happen on thin, slow moving stocks where there were no other prints right after mine. On certain stocks I always get the bid or offer price, so it seems that some specialits honor nx and some don't. But if it's all electronic how could this be? Maybe I'm missing something. Isn't NX basically the price that the new york specialist has posted?

    Corey
     
    #23     Apr 28, 2002
  4. InyOutty

    InyOutty

    lescor,

    Whether you are routing to other exchanges ain't the point my man. Regional exchanges (and other ITS participants) can squeeze in between you and the NYSE bid (or offer). When they do, YOU CANNOT NX that bid or offer.

    For instance, if you try to route an NX order to take an NYSE offer at 51 and CHX is offering at 50.99, you won't get 51. The specialist may send your order to CHX or fill you at 50.99 (or below) from his own account.

    "If a better bid or offer exists at another marketplace, the order will be routed to, or executed at the better price." (NYSE web site)
     
    #24     Apr 29, 2002
  5. Bryan Roberts

    Bryan Roberts Guest

    i would almost swear that the TXN specialist has found a way to block the NX prints....in the past few weeks i have sat on decent sized bids and offers without getting filled and of course the stock keeps moving. i have been using NX for awhile and have a good feel for when i should and should not be filled.

    has anyone else that uses nx frequently had this same experience???? and by the way Don, i use NX exclusively and i do get price improvements all the time...rarely do i feel i have gotten a bad fill..... when i want to buy..I WANT TO BUY!!!!!
     
    #25     Apr 29, 2002
  6. Seems to me that daytraders are like a school of piranha taking bites out of bigger/slower fish.

    When the bigger/slower fish are depleted due to unfavorable market conditions, the once cooperative piranhas are forced to turn on each other, making a bloody mess...and assuring that only the fastest/meanest survive.
     
    #26     Apr 29, 2002
  7. Very deep ...
     
    #27     Apr 29, 2002


  8. LOL If that was an intentional pun then it's a really, really bad one...

    As the food chain dwindles it's every man for himself...all you prop traders, look to your left and right, those are no longer your friends, you are surrounded by the enemy now...
     
    #28     Apr 29, 2002