Each situation would be different, so he may not be trading through your order. You have to remember that thousands of traders are watching stocks. If I see a spread get wide I try to get involved with a/the block print to give me that extra little edge. So to answer your ? other traders may watch the same stocks your trading and beat your order to the floor (not to mention floor brokers on the floor).
when you place a nx order it looks to be electronically matched, if not the order is placed on the book. there was a delay in getting the order to the book by using nx as your order type.
no problem. when a specialist spreads the stock up, if i think the print is coming i try to offer the stock 5-25 cents lower than the offer shown. it is different with all stocks but usually if your order(not nx) is placed IN TIME, enough below the quoted offer you will be filled with the block. sometimes you even get the offer as i am sure your aware. you need to have a feel for the specialist trading the stock.
the 2 minute rule is very important!!! from my experience of trading txn for close to 6 months now, i know if i don't have a limit order out there before the offer disappears there is no way he is going to fill me on the first print. And i would say the odds are 1 in 5 i get filled within 15 cents of the block print.
that's funny, because TXN is the stock i was talking about! i was long, the offer spread up something like 60 cents higher. i immediatedly threw out an offer 15 cents below the offer. it printed the block and i did not get filled, even when the bid went above my offer. it came all the way back down, and all the paper profits disappeared.
lol...yeah, txn is the king of ignoring his electronic book. He leans on that 2 minute rule all day!!! sometimes it has worked in my favor to be honest with you. there is no way i could make a profit off of him if i didn't "pairs" trade him.
Bryan, which 2 minute rule are you referring to? I recently read that a 1 minute 'ignore' rule has been reduced to a 30 second rule. <a href="http://www.tradersmagazine.com/articledetail.cfm?mag_id=1&aid=1182&year=2002&search="><font size=1>TradersOnline, 4/01/02.</font></a> Now, suppose they had 60 seconds (or even 30) to respond to the 'crowd?' What if they turned and did electronic business while the crowd stood there and watched thier orders sitting for half a minute? How would the crowd rate them during the annual 'rate the specialist' process? This rating system forces specialists to be more competitive in delivering executions to the crowd, because if they rate low, they are less likely to be considered for new franchises, which they covet. <font size=1>(The Supertraders, pp. 53-55)</font> I wonder what would happen if there was some impetus to cause the specialist to be more competitive in executing electronic orders. Instead, I suspect they use us as order flow to help out the crowd, which are their main customers, and therefore benefit themeslves at the expense of giving us first class executions, or even executions at least as efficient as the crowd gets.
While working at ETG and Bright i was told that in some cases the specialist has a maximum of 2 minutes to fill a marketable order. in the past 4 years i have heard people quote 1 minute, but given my experience with certain specialist i would say 2 minutes is more accurate in "real" life. judging from fellow trader's and my own experiences, calling the floor in protest is usually fruitless. there are a number of standard excuses that i have heard parrotted by the floor clerks. my favorite is "stock ahead"!!! i've witnessed one trader argue a $500 mistake for 2 hours and let a thousand dollar market slip past him.
Bryan...I hear you, Bud. Been there, done that, still do it... My 'favorite' is, 'less than a minute!' I guess that means that, if it takes less than that, anything goes. But I thought you'd be interested in seeing that bit about the 30 sec rule.