For people who trade 3-5k shares. All the time i see a 5k offer that i want to purchase. I know the stock is probably headed up. I buy 1k with the NX. And then try to buy 4k more with a limit order. And then the speciailist front runs me or somebody else scoops up the other 4k and then i'm left with only 1k and i become the bid for the other 4k. This will be nice rule change for me.
Silk I am sure you are a good trader but why not send a 2000 share market order then send your 1000 NX then bid 2000 shares 2pennies higher? 9 times out of 10 you will get the 2000 shares market order right after your NX. Then your 2000 share bid 2 pennies higher might get filled or might not. But hey at least you got 3000 shares. And if he puts you on the bid with your other 2000 shares you will wakw up the buyer if he is really there!!!! But hey that's all for Naught now!
if i go 2k market order the specialist will still front run me or other NX'ers will get the offer. The specialist will hold my market order for 30 seconds and then fill me up 5 cents. Not always, but often. With the new rules I will be able to grab all the stock i want at the price i want.
gotta agree with silk on this one. bottom line, speed will become more important than ever before. personally, i hope the specialist throws his hands up and lets the stocks trade. there is no way he can keep up with the action. i've noticed this already in a couple of my stocks.......but then he takes back control and slows it wayyyyyyyyyy down. i just hope there are some types of limits on how often he can "turn it off."
The bottom line is whether the bids/ offers shown are public orders. You always have a greater chance of making money when the order shown is just a book limit order. Now, if NYSE really wants to change things, they could show all market orders in the book as they come in, and could eliminate the 10 second open book rule. Of course, that would be taking away most of the specialist's advantage of seeing order flow before other traders. So, it will NEVER happen.
Getting rid of the 30-second rule that the Specialist has to "play" with a market order is gonna allow us to grab stock as fast as our trading platform will allow. Thus, there will be an emphasis on how fast your system and platform is. Can't wait to use ETG's new ETG-TRADER with the OC3 internet backbone that flies at 9.6 gigabytes per second. Basically, 3 times faster than a T-3 line!
Oh yeah you can count of them to always rule for reducing their benefits at least they can always claim so and even if it is fake there is no choice since they make the law http://mapage.noos.fr/benhamou_e/documents/articles/ECN.pdf <IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=427598>
http://fisher.osu.edu/fin/journal/jfidd.htm THE BIG NOISE FROM COLUMBUS: THE JOURNAL OF FINANCE BREAKS THE NASDAQ SCANDAL, Investment Dealers Digest, May 22, 1995. (excerpt follows...) If you think the Journal of Finance is just another dusty, ivory-towered publication for egghead professors, ask the Nasdaq Stock Market. Last year the Journal accepted for publication a study of Nasdaq spreads by two assistant professors. Then the fireworks began. The paper, by Vanderbilt professor William Christie and Ohio State Professor Paul Schultz, pointed to alleged tacit collusion by Nasdaq market makers. The article caught attention of the popular pres, and the ensuing stories triggered dozens of class action lawsuits by lawyers on behalf of investors. Then the Justice Department, which also read the article, launched a massive anti-trust probe of the Nasdaq market. "Nobody expected this to happen," says Rene Stulz, the professor who edits the 50-year old publication from Columbus, Ohio. But it's not the first time a Journal of Finance article made waves. In 1992, the Journal published a paper by two University of Chicago academics, Eugene Fama and Ken French, disputing the value of the famous volatility measure, Beta. The led to headlines across the globe proclaiming "Beta is dead" and some handwringing at investment shops that based their portfolios on Beta. Stulz says dozens of papers are still rolling in trying to refute the original paper. The editors of the Journal could also smirk when the first Nobel prizes in economics were awarded to financial economists. The work for two of the winners, Harry Markowitz and William Sharpe, had appeared there also. As for the third winner, Merton Miller: "He's an associate editor," says Stulz. If the Journal can't exactly move markets, it has enough real world impact that Stulz counts many Wall Street investment banks and money management firms among his 8,000 readers. Five issues a year will only cost you $57. If you haven't done original research, don't bother sending in an article. Only about 6% to 7% of submitted pieces ever get published (6.4% to be exact, says the professor); at that, the Journal charges $70 just to read your paper. Nasdaq learned this the hard way when it submitted a rebuttal article to the Journal and got rejected. This rejection did not escape the attention of the lawyers suing Nasdaq market makers. In fact, they included in one of their briefs. "A lame industry rebuttal has been rejected twice by the Journal of Finance, once on peer review, and again on appeal to the editors." (Nasdaq has since gone to hire a group of well known economists, including Miller, to prepare studies refuting the original paper. All papers-Nasdaq or academic-get the same treatment.