nx button

Discussion in 'Trading' started by trendsetter, Jul 30, 2002.

  1. can the specialist disable the nx button? there have been many times i nx an order and i dont get the fill. (yes there was plenty of size there). I notice it happens mostly in the wild stocks for the day, like JNJ & COF last week and SEE today. someone told me the specialist can disable the button. whats worse is if im not getting the nx i put in a limit and cancel the nx and sometimes i get a double fill. If the market starts moving and i use my nx on a stock that it doesnt work on i have to wait 30 seconds to use it again on a different stock. whats up with that. anyone know if they can disable nx? thx
     
  2. the specialists can disable the NX, and the 30 second rule only applies to the same stock.......specialists can also show only 100 shares on the bid or ask to effectively disable NX
     
  3. nitro

    nitro

    Every trader should have a copy of: (stolen from Avalanche in another post) - just got my copy today - I live about two miles from the place.


    ==========================
    The Exchange Constitution and Rules

    The NYSE's Constitution and Rules are available from the following source:
    Distributor Phone Format
    Commerce Clearing House, Inc. (800) 248-3248 Paperback
    (800) 449-6435 CD-ROM



    The Exchange's Constitution and Rules are also included in the three volume looseleaf service, "New York Stock Exchange Guide". Included in the Guide are the Exchange's directory of members, member organizations, branch offices and listed securities, the New York Stock Exchange Constitution and Rules, and related federal laws and regulations. For copies of the guide, contact:


    Commerce Clearing House, Inc.
    4025 West Peterson Avenue
    Chicago, Illinois 60646
    (773) 866-6000
     
  4. right on!

    how much do they squeeze you (note the pun) for those publications (aka "that sh!t") ??

    thanks
    bung
     
  5. regarding nx...

    i don't know what IB's deal is with nx, so my questions may be null...but i'm wondering what the point of having it is.

    but say i am a bidder for 7500sh (where my 7500sh limit order is below the best bid, and thus bound for the book) in a rapidly declining stock, in whose destination the specialist has a vested interest; maybe he wants to be short or flat in front of a market short, whatever. so my bid is maybe .25 below the last sale, .10 below the current best bid when he first saw my order, and he knows it'll hit my limit price in about 30 seconds.

    so this stock is dropping, and he'd like to be selling. he has to provide those 100sh bids every nickel or so, in order to keep his usual, orderly market. are you saying he would disable nx to step in front of an incoming seller by selling me the 7500sh and basically keeping nx disabled to prevent incoming orders (or the mkt short) from hitting it? he acts busy and holds the 7500sh bid for up to 1:30, then when the market moves to my bid, he puts it up only to hit it before anyone else can, claiming it was a fast market, so it's not his fault. and he gave price improvement to me by selling me the 2700sh .01 above my limit price...saving me $27 and earning himself maybe $1000?

    otherwise, i can't really see how disabling nx would help him, since the only thing he'd be able to "protect" himself from is incoming orders hitting any limit orders he put on the book himself when those orders either weren't real, or he realizes he made a mistake. maybe a big buyer came along at the last second and he didn't want to sell those 10k shares he posted on the offer after all. he could do that, but putting out huge limit orders and then being able to back away from them at the last minute (i thought) was something only the real scum, the options MM's, do....maybe the specialists are worse than i thought.
     
  6. lescor

    lescor

    I've found that it depends on the stock. It seems some specialists just ignore it and others will let you get some stock with it. I use nx all the time, but with some stocks it's better to just go with a limit order 5 or 10 cents over/under the posted price, or else you'll never get the stock. This is when things are moving fast, when it's slow I never have problems nx'ing orders.

    I think that specialists can use the 'fast market conditions' excuse to basically suspend the rules and do anything they want. Ever try to get into WMT or IBM when things are moving quick? They'll never let you in at the posted price.
     
  7. Eldredge

    Eldredge

    It has been my experience that a specialist can do just about whatever he wants :mad: . It may not be ethical or even legal, but if it is profitable he will do it. Market Makers used to be just as bad, but the ecn's gave us little guys a chance to force them to at least honor their quotes. I guess the important thing is to learn to play the game the way it is rather than the way it is supposed to be or should be. Nasdaq has gotten much more transparent in the last few years, hopefully NYSE will get better in the future. I would be real happy if I could just get an instant fill for the amount the specialist is showing, or have my bid/offer show up if it is better than current (I really don't think that when a specialist opens the spread from 5 cents to 50 cents in a liquid stock it is because there aren't any other bid/offers in between). Good luck.
     
  8. Right. The specialist can 'freeze the book' at his discretion, thereby disabling NX. No alert of any kind is necessary. Normally, the size will revert to 1X1 and nothing will happen for a time...

    An NX order not filled goes straight to the book, which is <I>order purgatory</i>, and of course the specialist is a minor deity.

    An electronically entered order, including an NX that has been booked, can be ignored for 30 seconds (though it often is ignored for longer, and this is not, to my knowledge, the '30 second NX rule'), while the crowd finds itself in no such trading Siberia.

    Think of NX this way: a percentage -- I deduce that it's the majority -- of shares sent NX wind up on the book. The book is the man's edge, and therefore, despite being touted as the great equalizer for the average investor, NX is effectively an <i>order flow generator</i> for the specialist. And the specialist, as principal, will use that order flow to his own advantage.

    Of course, the NX order that gets filled is a nice thing to experience...unless you tried to cancel, which, interestingly, is not allowed to happen 'instantaneously' like an NX fill is (unless it's to the advantage of the market maker).

    I wish I could say that your conclusion isn't correct, Bung, but I have too many reasons to believe it may be. Sounds like you are starting to understand the mind of your adversary.

    Trendsetter, I don't know where you trade, but if it's a prop firm, then all the traders may be aggregated into one account for NX purposes which means you are competing with the other traders for the fill on any particular stock. If your NX button is ineffective, if might be because someone at the firm has hit the specialist and invoked the 30 second rule on that stock which applies to the firm's account, even if a thousand traders work it.

    Elredge, I agree. If you're in a position, and the specialist freezes the book, it's a sign (usually) either of strong continuation or of reversal. That can be useful information.

    The specialist is a 'market maker' (and sometime market faker) and he's human so of course he is going to behave in ways similar to the OTC variety, using any and all rules and loopholes therein for his own benefit.

    NX, like SOES, is awesome in theory, but limited in practice.

    PS. There have been several good threads on NX, so for more info try the search feature.
     
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  10. i think the 30 second rule applies to the same side of the market no matter what stock. if i nx GE to buy i have to wait 30 sec to nx anything else long for 30 sec.
     
    #10     Jul 31, 2002