I'm mixed on this issue for a couple of reasons. I think that funds are going to have a more difficult time getting into bigger size since they won't have a human there to manage iceberg orders. At the same time, having a computer do it in a systematic fashion, might just create an opportunity for discretionary tape readers to exploit. My sense tells me that firms like Pipeline will continue to expand and that hidden books of block orders will take greater hold. There needs to be recognition of that fact that funds will run reverse desks more often in order to load up on stocks that they want to own. The logical consequence of THAT is more frequent fading of moves and, yes, lower volatility.
just a plain nightmare, mkt sucks already as it is...take away the few opportunity that exist and bang...scaplin' for pennies all day long.....kewl!!
Yeah, I don't understand how they can claim a fair and open market with pipeline, liquidnet, etc available to institutions. I mean, who is the retail guy really trading with, manufactured order flow, meant to rob us?
The notion that all trading opportunities and trends, etc., are created by the all-powerful specialist, follows from a lack of familiarity with other markets. Markets for things like QQQQ, SPY, E-mini futures, and all kinds of highly liquid non-specialist markets, all over the world, prove that there will always be trends and trading opportunities, long after the specialist is gone. Those opportunities have always existed, and they will increase whenever the costs and risks of trading are reduced. Those opportunities will expand and increase whenever the role of the specialist can be diminished or eliminated. The downside, for those traders who know nothing except how to suck on the icy specialist teat, is that those parochial traders will have to broaden their minds and learn how to trade for real. Old dogs who can't learn new tricks will get washed out of the business, but their cries are no reason to preserve an antiquated system of parasitic corruption, which jeopardizes investors, publicly traded companies, confidence in capital markets, the economy, and even the foundations of U.S. capitalism.
Ultimately it does not matter if they stay or go. If a trader uses the specialist as the main strategy for a trade, then that trader understandably would want the status quo. Back in the mid 90s I was in the s &p 500 pit at the CME, and everyone was scared that the pits were going to die in the next 2 years or so. Well over 10 years later order are still routed to the pit because that is where big liquidity is available. In some fashion, he specialist will probably be around for at least 5 years. You have time to find some other inefficiency to buzzard over.
jim--none of those mkt u mention move in full percentages trendin' all day long...let's be fair here spy, qs and futs suck compare to nyse and a trends are very rare. nyse gives u multiple opp to pick up many many stocks that trend every single day; and naz, certainly better is no any where near as fluid and trendin' as nyse. and it's not a q 'bout suckin' on anyone: buyin' a mkt and let your pos run into close with 1-3% gains is what real tradin' is all 'bout.
Apparently in your twisted logic, the specialist is there to provide daytraders with profitable trades. The specialist is an edge as well as a handicapp, depending on the style and the stock. He scalps the spread, first and foremost. He will manipulate order execution on a regular basis, which incurs additional cost & slippage whether you are on his side or not. If you cannot figure out how that translate into a transaction cost, well then it's a sign of your limited thinking capacity. Too many daytraders rely on the specialist edge to make money and accept the money the licensed thief takes from them as the cost of doing business with NYSE. If your style has little concern for tape reading, such as buying some steels because the index is going up, the specialist is nothing more than additional transaction costs & execution interference in 90% of the cases. Specialist supporters simply cannot let go of their edge and look at the bigger picture. There is much more money to be made without them. Need proof? Compare Nasdaq moves vs NYSE moves. Who is to blame if you are not quick enough to capture them and beat the computers? It's not the black box's fault, it's the human limitations.
Bitstream, I say that whatever you are doing with the NYSE, that you can't do elsewhere, isn't "real tradin'" at all. It is, instead, trailing in the wake of a system of parasitic corruption. Society pays a very high cost for the rents enjoyed by the government-supported specialist monopoly and by successful NYSE-dependent traders. Society cannot afford to pay that price, and will not do so indefinitely. Competitive forces are building behind, and will eventually burst entirely through, the dam of anti-competitive government strictures enabling the specialist system to continue.
The amount of disinformation in this thread is very high. Specialists cannot uptick or downtick a stock. All they can do is participate in a trade where s/he finds liquidity to make a matching trade, as a result of an imbalance or otherwise. His #1 goal is "to keep an orderly market and to help provide liquidity as a last resort." He does this as best he can, although in the recent crash, many specs walked off the floor and refused to do their job. But 99.999% of the time they do what they are supposed to do. Because they are human and often cannot keep up with supply/demand coming into his post, he often freezes the book while he matches buys and sells, mostly market orders with size (usuallly > than what can be accomidated by NX as a limit order.) From these points, all else follows. BTW, the biggest volume traders of the NYSE are the CBOE market makers. nitro
jimrockford, Are you are a paid basher? do you even trade? I dont think you make any sense. You ovbiously have a ax to grind.