NYSE openbook traders

I trade 1 stock, trying to get a feel for the specialist. It's in the SP-500, does more 2 million shares a day.

 

I use a variety of things at the open, such as opening range, pivot points, price RS to futs, etc. in conjunction with the tape and open book to trade early.

 

Is the “top of book” bid and offer in OpenBook the same as the NYSE’s best bid and offer?

A: The best bid and offer in OpenBook represents only the limit orders on the specialist’s book and not the entire market. The NYSE best bid and offer may include book orders, crowd interest, or specialist proprietary interest. Therefore, the “top of book” may or may not be the same as the NYSE’s best bid and offer.


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Can the NYSE’s best bid and offer ever be inferior to the “top of book” in OpenBook?

A: Because OpenBook is updated every ten seconds and the best bid and offer can be updated more frequently, there may be instances where the NYSE’s best bid and offer may appear inferior to the best bid or offer in OpenBook.


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Can a bid price in OpenBook ever be equal to (locked market) or greater than (crossed market) an offer price, and vice-versa?

A: Bids that are entered at or higher than offer prices will be reflected on the book until they are executed. The same is true for offers entered at or lower than bids. NYSE market rules treat these “marketable limits” as market orders, and they are executed as market orders according to NYSE auction market rules. Locked and crossed markets are typically short-term situations that are corrected by a subsequent trade. Locked or crossed markets occur more often in very active and volatile stocks.


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Why is it that the opening and closing price may be different than what OpenBook information indicates it should be?

A: Limit orders and market orders often accumulate between the previous night’s close and the opening. In some cases, market orders comprise the majority of pre-opening interest, and market order imbalances become the key determinant to where a stock will open. Because OpenBook does not contain market orders, it may appear that the opening price and OpenBook are out of synch, when in fact they are not.


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Do sell short orders or stop limit orders ever appear in OpenBook?

A: Sell short orders and stop limit orders appear in OpenBook when they are filed on the book or “elected” as limit orders. Because these orders have special conditions, they will appear in OpenBook at the price where they can be executed.

 

What about the opposite?

Couple of times today a size bidder shows up in open book that is better than the TXN NBBO bid. Then a few seconds later the size and quote in the open book becomes the high bid on the level II. I didn't think open book could lead the level II quote with regard to NBBO. Can it? Could be my screwy quotes.

 

Yes the openbook leads quite often. There's a strategy in them hills.

 

Another thought is that what you are seeing are buyers and sellers crossing the market looking for entries. I often do this, and many times will cancel my order. (And often, the specialist will even let me out... :eek: ) So, you can imagine that a lot goes on in those 10 seconds between snapshots.

Just watch a thick stock like Citi when the market rolls over. You'll see a bunch of Offers come into the Open Book both between the NBBO and below the Level 1 Bid. Sometimes, the size can be quite large on these.

 

Open book (even with the delay) way ahead of the NBBO of the baby bells during the blood letting in those things today.

I mean you have to have some balls to trust the size is really there when the stocks are getting rocked like today but a couple of times you could have leaned on a huge bid on open book that the specialist had not represented yet because he obviously had his hand full with the crowd and all the chaos....and picked off an arca or island order that was crossed up by as much as a dime in a few cases. (the bids on open book eventually showed on the regular level II as big upticks)

Can't hesitate though....got to buy and offer out fast.

Liking this openbook though.

 

Does anyone's system allow them to know when openbook has updated. For example you have open book open and it counts down to "0" then boom "update". then 10,9,8, etc.

For example if I pull up LEH and want to get a look at the open book it would be nice to know if it just updated 1 second ago or 8 seconds ago.

The 10 second refresh is a constant is it not? However not every open book updates at every 10 second interval during the day does it? I mean C may be updating then 2 seconds later JPM updates etc correct?

Anyone else want to offer up thoughts on how to profit from OB even with the 10 second delay.

Also if anyone could share whether or not they know when the 10 second update on open book hits that would be helpful.

(obviously the OB providers I have seen don't beep or flash or signal you when it has just updated, and since the NYSE likes to control this data and limit what other firms might do to enhance it as a trading tool, maybe nobody has this or maybe someone does, if they do please post or PM me. I am using OB more lately but still click through a lot of symbols and it would be extremely useful to me to know which OB quotes just refreshed vs. the really stale ones.)

As for anyone that wants to post, that OB is worthless and that real traders don't need it and all that B.S. Don't waste your time, the guys that are using it are using it for very specific types of trades and doing pretty well.

Am just trying to gain some knowledge for myself here as I mostly trade nasdaq and only recently have begun to use the book during dead times to find some opportunities in lower vol names.

 

First, the open book can give a total deceiving view and scare people out of good positions (or people into entering bad positions). This is why many top traders don't use (or refuse to look at if they have it) the open book.

Secondly, the tape size (that's not in the open book) can be more legit. Any jerk can play with the open book (put in fake orders or pull them on a whim).

Lastly, specialists often are especially slow to update the book (not just 10 seconds). And sometimes, they never accurately update some bids/offers (the stock can trade right through a bid/offer that was long canceled, and the bid/offer will stay there for ever (many minutes, an hour even). This has heppened even with my own bid/offers.

Also, market orders, stops and special electronic orders are not shown, and when combined with the floor, ecns, the specialist book and many institutional orders, this is all the more reason why many top traders find the book hurtful and deceptive rather than a useful tool. I guess it can depend on the person, though. As a matter of fact, you'll often see the stock spread up through many large open book offers (or bids if vica-versa) and then big prints (cause the institutional or pit trader orders, which are the real key, swallow these other offers.

 

Share your knowledge on how traders are doing well with open book and I'll share mine on how to find out when OpenBook is refreshed.

Cash