I think SethArb was asking about Nasdaqtrader.com's reporting of large participants in a stock monthly. I wish I knew the answer but I thought that those figures represented trades made under the user ID (MM symbol) only. Anyone know if those also include trades made through ECNs? Warren
With electronic market the organisers don't need any more intermediates like market makers and small brokers as intermediates eat their profit. This is just business logic. To illustrate this, I once worked in a mission in a team for a few months in a big multinational for their intranet. Their objective was to propose to their intermediates a new electronic system to improve their reactivity to clients but it was just a pretext presented to the intermediates, they said that the real purpose was in fact to have directly access to the information concerning the intermediates clients so that they can become directly their clients. Of course their intermediates will be suspicious so the system must really bring them some values for them to accept it... but it brings them value only for short term since for long term, the purpose is to eliminate them haha ! So only the big ones will be able to stay. They will kill others by lowering their profits but don't think that it will be for the public goods: with concentration come inevitably oligopoly and monopoly, they first lower fees and tax and then increase them at will. Also as I said, with electronic manipulation is much more easier technically speaking (as shown by some economic and scientific researchs) and legally speaking because when a human entity manipulate the market it can be more easily accused than multiple dispersed electronic systems apparently unrelated wich just follow the same program whereas the effect is the same and even better from the manipulation point of view. From marketing point of view this is also excellent for them since they can make believe to the public that they will get rid of the pirahnas of Wall Street whereas the sharks will still be there .
Order flow alone can just give support and resistance it can't give the big picture. Price discovery is a farce : there is no "discovery" but rather "revelation" of what has been planned globally: so you are late if you are discovering after others. Just read again Jesse Livermore and the chapter where he said he realised than his ability to read the tape wasn't enough any more when he came to Wall Street. Today I don't bother to read the tape any more also as I used to do in the past when I was a micro scalper when the market was still open cried. In fact it happened to me what has happened to Livermore, I've been washed out severely before realising than something in the tape reading has been radically changing and so profits. So I have adapted to become more "globalist" : that's what in my model now.
A little reminiscence from Jesse Livermore <IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=439901>
With NYSE, they basically agree on the transaction and call up the specialist to let him know that they want the block printed in the market. So the specialist will trend the stock in that direction, let the block go off and thats it. Sometimes these transactions are the reason you see those out of sync prints also because the buyer/seller just say "we did this transaction at this price". I call these BS prints since it's just 1 big buyer and 1 big seller that reach their price without the actual trading floor or ECN. Noone else can partake or scalp these prints, if you make/lose money during these movements it's vs another day trader. Back to the actual topic, is Naz Level II similiar to NYSE Open Book. NYSE's book is useful but it does not show all.
I trade Naz all day and scalp alot. I constantly see situations where prints (sometimes significant volume) will go off at a level while the quotes do not change at all. The prints are showing trades going off like crazy at that price point and you can be sitting there with a bid or offer and your not gettting hit and none of the other players appear to be geting hit, refreshing etc. Then of course the price moves away from you or eventually you get hit but it feels like you are the last guy in line (even if you were there well before the price got there). My assumption on this situation has always been that the prints were institutions crossing trades with each other and then printing the transaction to the tape, or simpply an instituion internalizing orders at that price and then printing them. Does anyone know the truth about this? It is frustrating as hell to say the least. Makes you feel like a spectator at times just standing there watching prints going off and having no way to participate in that liquidity. MACD
I feel your pain too. I believe it has something to do with MMs being allowed to fill themselves now and we see those prints but can't participate. Regards, Warren
I might be off topic here ........but i want to know 1) if there is lets say 2 market makers at the same price level, which market maker will get hit first?? How does priority work within market makers??? 2) Do market makers need to cover their position at the end of their trading day or if they are allowed to keep some in their inventory.
1) Price, Time, Size (displayed) is the priority. So if an MM is only displaying 1 but has thousands he'll get 100 shares and then the other MMs will be filled for thier displayed size and then it'll hit his reserves. 2) MMs don't have to cover their positions. Regards