Nasdaq to AMEX....

Discussion in 'Trading' started by Don Bright, Aug 6, 2002.

  1. This should start a trading trend....

    On Monday, August 12, the American Stock Exchange plans to begin trading
    Nasdaq securities on the floor of the Exchange via our normal equity
    processing systems. The program will commence with trading in these 9

    Symbol Security Name Specialist
    ALTR Altera Corporation Performance Capital Group LLC
    ASML ASML Holding N.V. Ordinary Shares Equitec Specialist, LLC

    ESRX Express Scripts, Inc. Bear Hunter Structured Products LLC
    FITB Fifth Third Bancorp Performance Capital Group LLC
    HBAN Huntington Bancshares Incorporated Bear Hunter Structured
    Products LLC
    HGSI Human Genome Sciences, Inc. Equitec Specialist, LLC
    LNCR Lincare Holdings Inc. Bear Hunter Structured Products LLC
    MEDI MedImmune, Inc. Equitec Specialist, LLC
    SPLS Staples, Inc. Performance Capital Group LLC
  2. What trend is that Don? That the Nasdaq will make the transition to a specialist system?

    Imagine hearing Don saying, "made 25 on MSFT on the open". Heh. :)
  3. Hi Don,

    What effect if any will it have for us as traders?


  4. The question has always been "will the markets move towards the OTC (MM) methodology, or towards a single marketplace (Specialist)....and even though we have seen a lot of movement towards the OTC way (via ECN's etc.), this shows that the single auction market may be making further strides.

    I'm not saying that the AMEx is the best place to trade, just that we may access to "opening only trades" and "MOC's" and other big benefits ....for the top Nasdaq stocks.

    Just gotta keep up with all the changes...

  5. If you have problems with the structure of the OTC world, then the BLACK HOLE that is the AMEX both from a technology standpoint and the fact that they are a bunch of thieves will make your head spin. I am a NYSE trader who refuses to ever place an order on that god forsaken exchange.
  6. Are you saying that these stocks are going to trade EXCLUSIVELY on AMEX or some other specialist auction system? If not, then there is no point in OOs or MOCs is there?
  7. This is AMEX last ditch effort to save itself - as the Nasdaq is becoming an exchange and wants nothing to do with the AMEX -- The AMEX is part of the Nasdaq - but the NAsdaq is getting rid of it -- Soon the Nasdaq will have its own ETF's, and soon they will have something called the Alternative Display (?) market where they will trade listed stocks.

    The writing is clearly on the wall -- everything is going towards an electronic market - sure the good old boys on the floor will put up a good fight - but inevitably technology which provides a fairer and faster execution will win out.

    I trade the SPY's quite often - there is NO comparison between the fills and speed of execution I get on Island over Amex.

    And alot of times I trade listed stocks on ISLD,ARCA and instinet ---many times I get much better executions than the NYSE --

    Dont kid yourself in thinking the specialists main concern is matching orders - they are looking to make as much possible from selling to us at a high price and him buying it at a lower price.
  8. quantman


    Don Bright has a point. Look at what is happening to the Nasdaq marketplace. Nasdaq trading desks are shrinking if not completely disappearing all over the street. Most market makers can't make any money in the decimal world. It takes about 50 executions to get any order of reasonable size done. And major desks are trying to figure out how to move to an Agency trading environment.

    I have seen some of the material on this program. The plans include creating an orderly opening and close and enabling traders to size done at one price. I don't know if they will succeed or not, but, in this environment, more liquidity providers offering up a new model is a welcome addition to this marketplace.

    And, by the way, Nasdaq never owned the Amex; the NASD did and they are also selling off Nasdaq. And the NASD will run the ADF (Alternative Display Facility) not Nasdaq.
  9. Quant, do you ever trade or do you just run speadsheets - maybe, you did trade at Long Term Capital - LOL -- Just Kidding !!!

    I realize the nasdaq and OTC desks are having a tough time - the point is -- I dont really care where things trade but everything is moving to an electronic platform.

    Look at the volume of the QQQ's on ECN's vs AMEX -- Amex started the ETF's and every month they are losing more and more volume share to the electronic marketplaces of the world.

    Look at the volume of the electronically traded S&P e-minis vs the Regular size floor traded S&P -- the e-minis now lead the market --
    The old fashioned specialist trading floor is a dinosaur --

    Believe me from the prop firm day trader to the institutional trading desks of places like CSFB --- people are finding ways to circumvent the specialist.
  10. quantman



    You make a good point regarding the QQQs trading on the ECNs. Quite electronic. The question is 'why'? From what I've read, in addition to technology, there are two additional reasons. One, QQQs like other ETFs have a different form of price discovery from equities. Price can be discovered from NAVs and futures. Second, Island does not participate in the same (albeit broken) national market system (ITS) that the exchanges participate in. This is why Island shows the worst executions for small trades relative to the NBBO among all markets.

    Regarding the electronic trading of Nasdaq stocks - there has always been an upstairs dealer market that has mixed human contact with customers and executions being entered into electronic systems. The only difference is that the dealer world had people and trading floors at dozens and dozens of brokerage firms. It could be argued that one trading floor interfacing with customers and entering orders electronically is more efficient then hundreds. Here, I am only really talking about size flow, by the way, not retail.

    Also, if everything is moving to an electronic platform, why is the NYSE still doing 80% of the volume in NYSE listed stocks? The Amex, I think, is doing 80% of the volume in its equity products as well. Island has made very little progress here.

    I must agree, however, that people are finding ways to circumvent the specialist. As they should. On the other hand, they are very happy to have the specialist there when they can't.
    #10     Aug 7, 2002