Discussion in 'Order Execution' started by chaos_trader, Apr 30, 2004.
I am looking for a book about the NYSE OPEN BOOK and the techniques of trading with this tool?
It's way over rated. The specialist updates the book at his leisure and in times of high volatility he freezes it.
It's ok to get a glimpse, but IMO you definitely can't trade off it.
Its not totally useless!
When the inside market is not showing any size, you may see the
"real" bid down 2 - 3 cents. It is nothing like looking at a NASDAQ level 2 market on OTC. It is not worth paying extra for NYSE.
Open Book is a joke.
It used to have a 10 second delay up until January of this year.
Now it's a 5 second delay, and it does indeed get FROZEN during a fast market and when a "size" block hits the tape. Also, there are guys in the "crowd" that are executing discretionary orders and you obviously don't get that kind of input in Open book.
Open Book was a great tool when no one else had it. Everyone has it now and you know what happens when everyone has access to the same tool, It becomes much less useful. Oh well....
Open Book is good tool, if you really understand how it works... if not, it can be a a negative.
Some people still think Level2 is of some value...L2 lost all value when they let the public have in the early 1990's....LOL
Just a tool...that's all...
The Free Money MMM situation was completely off the Open Book.
On days like today, however, Open Book will most likely hurt you since most of the sizes are fake.
And more importantly, a large bid or offer does not equal strength or weakness. That is a major concept that newer traders take a long time truly absorbing.
I have a lot of Level II experience, but never used Open Book until a couple of months ago. Either I'm missing something or it is next to useless. It is frequently frozen or crossed. In a slower mover, I suppose it does indicate potential S and R levels. Of course, you have no way to know if you can actually get filled at those levels, unlike Lev II where if you hit an ECN they have to fill you.
It's vital if you trade very thin stocks, because the size shown in those issues is usually real. For large stocks, agreed, mostly useless.