I truly doubt it (and hope not!!) - I should qualify this by mentioning that I b!tch about the NYSE as much as anyone, but I do benefit monetarily from the way the NYSE works, so maybe I shouldn't b!tch so much... Remember the NYSE is the best-capitalized exchange in the world, and the same gripes you have now are the same gripes that other off-the-floor customers have had going as far back as I can tell (50 years or more). Between the NYSE and the AMEX, the AMEX would be the first to go, but I don't see that happening either. Remember, as a smaller-size trader, the nasdaq caters to your needs FAR better than does the NYSE, and I've posted about this before, so smaller-size traders (and maybe scalpers, especially if you use a momentum approach) are, IMO, better off with the naz. Plus the execution on the naz and variety of order types can't be beat. Not knowing how the NYSE works is the biggest problem that OTC traders have when they try to make the switch, and this problem often materializes as complaining about the NYSE specialists. You can trade both markets, as I do, but the game is very different between different markets and you have to stay sharp as they are on separate paths of evolution. i hope this helps...
The reason I say this is because the specialists have an unfair advantage over other traders in that they control order flow...and can profit by manipulating the market to their advantage. If you send a market order to a NYSE specialist they may hold your order until it becomes profitable for them to execute. Do you trust market orders to Island more or a market order to Bear Stearns for example? The fact that they profit at the expense of other market participants, creates a situation where people may move to other markets (NASDAQ, GLOBEX) to trade. It is true that the NYSE is the premier equity exchange in the world...but how long will people put up with specialists taking money out of their pockets? I trade e-minis because of the transparent, liquid, no-BS order execution. I don't believe in a market where one person dictates a great deal of the trading...
the NYSE traders all seem to agree that there's some strange mojo at work down there. but i don't see them doing away with the specialist.
heh apparently over 200 years now. let's not forget that the naz is no walk in the park, either. the naz, IMO, is far more prone to sheer manipulation, and with the naz, you lack the focal point for scrutiny that you have with the NYSE. how many times on the naz do you see BRUT locking the market?? is that what you'd call fair??
People may have been putting up with it for "over 200 years" as you claim but 200 years ago people didn't have choices. It's only more recently that people can say I want to route my order to ___ vs ___. The specialists impede the free market system and make a profit at doing this. I agree that the NASDAQ is not the best...however I think that NASDAQ is a more fair and orderly market...don't you? The specialist is paid to provide this "fair and orderly" market, and they clearly don't in some circumstances!!! I'm not saying what they do is odd...if I was a specialist I would do the exact same thing! It's just what they do is wrong in my opinion. I don't know about you but I'd trust my orders being handled by a computer more than a specialist. I trade very small size so I don't know if my argument stands if we're talking about trading big blocks, but I don't really see what advantage a specialist offers vs a computer. Of course there are a lot of politics involved in doing away with the specialists, so the process may be delayed, but it's only a matter of time before they're all gone.
Then why has the more "fair and orderly" exchange moved in the opposite direction, ceding major trading turf to new specialists through AMEX? To this point, it strikes me as the worst "innovation" that's taken place in recent years: In my observation, the AMEX specialists are generally just big and unpredictable enough so they can't be ignored, and just small and unpredictable enough so that they usually can't be effectively traded off of. Sometimes, often on the same stock on the same day, you'll see AMEX quotes at inside market that have no effect - traded right through - and then a few minutes later you'll see AMEX stop or slow down a move just like a "real" Market Maker or Specialist might do - and then just a bit later the AMEX will virtually disappear from the action... I suppose that someday some or all of the AMEX Specialists or the markets they're involved with might "mature," maybe after enough traders take to bypassing them, but at present many AMEX Specialists appear to be exploiting their position, using the 30-second rule either to fill orders at bad prices in fast markets or to hold them, then back away or cross them. If anyone has come up with a useful way for a small trader to use AMEX, I'd love to hear about it: The best I've come up with are some theories that don't really suit my style of trading (e.g., in theory, you might sometimes get an execution off or around some AMEX quote that's obviously behind the market, but I've not yet managed to do it or even to try it). Throw in the forced closure of Island book on ETFs, and there's a good argument for starting an open boycott of AMEX, by the way. I also wonder if they'll find a way to make the same thing, or something like it, happen on the Nasdaq stocks they're into... Eventually, if ARCA's initiatives take off and if the proportion of other ECN action in NYSE stocks increases, NYSE traders may find themselves increasingly have to deal with similar complications. I guess it's just part of the ecology of the markets: There is a tendency to rationalize trading with new technologies, but anyone with enough capital and enough connections is still probably going to carve out a niche based on whatever inefficiencies they can exploit or, where possible, create. No matter how computerized and auto-executable a market gets, the bigger players are going to find ways to turn it right back into the opposite, at least temporarily. They've got their ways in the e-minis, too.
"I think that NASDAQ is a more fair and orderly market...don't you?" if you realy want to get screwed try trading nyse stocks in size on isld. there is no bid depth and there is usually a 5-10 cent wider spread. your theory that the nyse is going away is wrong. in fact it would of already happened if it were going to when isld started trading nyse. that has been a failure.
Yeah, the QQQ was an AMEX product anyway, so they got everyone hooked on it, and then pulled the plug on ISLD. WHICH really makes me wonder - how easy did the naz make it for AMEX to start making markets in their stocks??
I have never traded size on NYSE, specialist or island so I don't know about that. However, what you are describing is a lack of liquidity...not an unfair market where someone rips you off by playing tricks with your orders. Of course if the island book is not liquid there will be a larger spread and less size as you move from the inside bids/offers. But at least you know you can hit the bids and lift the offers virtually instantaneously...unlike the quotes by the spec's where you cross your fingers and hope you get a fill close to where the market is trading. If the spec's were gone the ecn book would be more liquid...you could see a quote, transmit an order and be almost certain that your order would get instantly. All in all...traders would be better off with a system like that. As for your second point, I never said the NYSE is going away I said the spec's days are numbered.