i'm STILL surprised more traders arent talking about these changes, or maybe there arent as many NYSE traders out there this effects... ive been keeping a tally on how much i get "screwed" by improvement wise on this new system assuming the stocks i trede were being beta tested and assuming the old way and i notice about 15 cents on average a day... doesnt sound liek much but on 1000s lots over the course of the year... do the math
A lot of people are still in the dark and are not researching it. They will be blindsided when this comes out and when the new NX rule takes effect. They will spend a month trying to figure why they can't get filled and why their price improvement is so bad. Then again maybe ignorance is bliss. As far as for me I have moved on, hopefully to green pastures, to the world of futures and FX. So hopefully the screw job fill days are over for me for now and my profit and loss will be more dependent on startegy and less on being blessed with a good fill. It will be interesting to see how the NYSE will look a year from now if this current investigation gets bigger. Maybe better order handling rules will come of it with stricter enforcement.
Best of luck to you trading derivatives. what have you come up as far as combating these challenges that lie ahead for NYSE traders?
Thanks. I hope the transition goes smooth. If the NYSE question was for me -- well I am not trading stocks anymore in the near future.
For me, last week was the worst so far for price improvement. I was seeing my trades go off in several NYSE stocks bunched up with prints two, three, and five cents beyond. That's telling me that some specialists are already trading this way. Of course, this could just be the direct, immediate, and short-lived reaction to the ongoing specialist investigation.... This week has been much better for price improvement. But there has also been much more aggressive (and larger) buying and selling in the stocks that I follow. For now, I'll just be .....watching with concern.....
I am not sure how price improvement will be handled once this goes into effect, and the NYSE website demo's really don't make it clear. It seems almost like they are going to give the specialist the option grouping for price improvement or not. Anyways, I have been thinking about the long term effects of NQLX. IMO it is going to have two effects, neither of which are good for daytraders. The change will make it easier/faster for size orders to get filled near the current market, which in turn gives investors better prices overall. So to that extent we really can't complain...an efficient market is better for everyone except us. But does anyone believe the NYSE is out to help investors? They would only go through all this trouble if it increased their bottom line and made the specialists jobs more profitable. I think the NQLX will make stocks more stagnant, decreasing the number of intraday gaps from large orders, and leaving the stocks to trade in tight ranges. If that's the case then many people trading gaps or enveloping give up those strategies, thereby decreasing liquidity nearby the current market. This would leave more stock for the specialist and floor traders who will be providing the NQLX bids/offers. Besides those that will try to penny the NQLX bids/offers I think liquidity is really going to dry up on NYSE, and they will lose a lot of business from us, offestting their new profits from wider spreads, and arb situations from NQLX fills. Last I heard we make up like 30%+ of daily NYSE volume. I just wonder if they realize they will drive away a lot of that volume, especially considering that without price improvement people will use ECN's much more. Bottom line is I think they believe this will increase their bottom line, but they are really going to shoot themselves in the foot.