NYSE "Open Book" helpful.

There's a great thread re scalping on the board and the NYSE "Open Book" came to mind when reading it. I had almost forgotten that it even exists.

On the face of it, the open book should be a valuable tool when scalping listed stocks but you know, I haven't read much about it here in a couple of months.

Is the open book just another (apparently failed) attempt by the NYSE to placate us or is it a useful tool for trading? Virtually no data providers are offering it except for RealTick and that is rather telling, imo.

Anyone using NYSE "Open Book" care to offer a critique? I think it might be helpful to read some real world info on it.

Best regards,
~Air (Jim)

 

It's better than nothing...but not by much. Like the good old days, many of the sizes are either fake or disappear when it really gets there. But it's better than nothing. I sometimes use the open book to place my stops...hoping that the size is real and, perhaps, I will be able to get out there. There are tons more things to be written about it...but, in the end, I think its just anohter attempt by NYSE to promote their market.."See? Now you can see what we can see! We got nothing to hide!" Yea right.

 

Day,

Thanks for the underwhelming reply.

Your comments, really, are much appreciated. It seems like everyone is 'ho-hum' about it....and you can tell by the lack of posts about it here that there seems to be little interest.

Anyway, thanks for the reply...much appreciated.

Jim

 

if the stock has too much volume it is pretty useless.
with lower volume stocks this tool is the best thing since sliced bread. S/R and tape reading is much easier with it. since these stocks have bigger spreads too, open book is a way to rob the bank.

they are many nasdaq traders or prop firm traders on the board, so they don't care about open book. (prop firm do trade NYSE of course, but they need volume so useless for them).

For a part of our operations, I would not trade without them. and actually, back then, I remember an outage of open book connection, we just stopped trading on these instruments. it's so much easier. often, just like free money at times. but not on stocks most our members are looking at.

that's on the positive side, obviously.
it's clear NYSE crafted Open Book as a marketing tool (and free revenue for them) at the same time they made pro data fee stricter. They needed money.
so, as you would expect, open book is not a tool 'to help the industry' as they like to say.
for data providers I guess it is a little trouble to implement, and they get no money for it (since you pay directly to NYSE). that's why it's hard to find. Realtick and IB offer it. If you can, try it and judge for yourself, since usefulness depends on your trading style.

tntneo

 

So are you using it in thinner issues to step in front of size with smaller orders? How do you manage risk- do you get out if the size you stepped in front of starts getting eaten away?

 

That sounds about right.

 

A lot could be said about it.
People should try it, it's pretty obvious after a while what you should do or not.
Sure, stepping in front of size is possible, although if you have size, it's better to pick the the ask. the book is good to find support and resistance ultra short term.
it's even more valuable as tape reading tool. since you can compare the 'official' view and how the stock actually reacts. it is even more valuable to see something 'not right' than expected reaction.
an example is bid being hit hard with no size at ask => don't be a hero, don't bid, you'll lose.
without the book, this would be invisible to you, and possibly deadly. it's just an example.

again, too many people here dismiss things without ever trying them. I don't care, I'd try to be on the other side anyway.

tntneo

 

I've used it for months, so it can't be said I dismiss it without trying it. Yet, it is only a little better than useless. Many top traders (traders who will likely make $1 million plus this year) do not use it or hardly use it. As was said, in thicker stocks it is pretty useless.

However, even in thinner stocks, it is often useless because for every time it helps you it will often deceive or screw you another time. The open book is slow to refresh often (so the stock price will pass right through where the open book says there is a bid or offer), and bids and huge bids and offers are often pulled at the last moment, right before they would show up on the tape. In other words, sometimes traders and firms are trying to scare people using it with no intention of actually buying/selling any stock there.

What's more, even when a bid does pop up, for example, it may entice a trader to buy even though the stock has done nothing. To be sure, what you won't see are the market orders to sell (which often dwarf the bid) or the floor traders selling.

Additionally, you might see a big offer pop up in the book, but even if it isn't pulled at the last second this offer might pale in comparison to the buyers wanting the stock. However, those seeing the offer pop up often get scared out of the stock. Thus, for every time the book helps, there are other times (often more times) where the book will deceive traders or make them scared out of good positions. These factors alter people's trading usually for the worst, whether very obviously or subtly. And hence, this is why many of the top traders eventually decided not to use the book at all or to use it only rarely.

 

I haven't decided if it's worth the space on my monitor. I tried it and wasn't able to make sense of it. If you can make it work for you, more power to you. It'll be a long time before I trust any order information that comes out of the exchange, besides a print. And even that's suspect, sometimes.

 

i love the open book. i also trade alot of thin volume nyse stocks. bottom line is its just anther tool. its is tougher to use the book on thicker issues. one prime example of the books benefit is this: when there is size on the tape and not on the book you know it is the specialist trying to drive the stock in either direction. the book shows customer orders (yes these disappear as well(traders painting the tape)) however size is less likely to disappear on the book than when its on the tape alone. btw, size disappearing happens the most in light volume markets i.e. august. in light volume markets i tend to stay away from size only on the tape.