from Sat NYPOST October 28, 2007 -- A massive new erosion in the New York Stock Exchange's lucrative equity trading business to cheaper and faster competitors like Nasdaq - some 60 percent of volume is no longer traded by the floor, a jaw-dropping record - will force the Big Board to pull the plug on its multimillion-dollar "hybrid" system, experts say. "The rapid decline, especially over the summer, has been pretty abrupt for the NYSE," said Jamie Selway, managing director at White Cap Trading, an institutional brokerage in New York. "A few years ago the exchange was sitting pretty." The sudden decline in the proportion of stock trading by the floor was certainly surprising - but more could soon follow, according to Richard Repetto, an analyst for Sandler O'Neil & Partners who follows the NYSE holding company, NYSE Euronext. The NYSE's hybrid - rolled out with great fanfare this year - currently matches less than 40 percent of all NYSE-listed volume, he noted. Only about two years ago, it was double that. Today, under attack from the likes of Nasdaq, BATS and Direct Edge - which trade NYSE stocks on ECNs and superfast trading systems - the only gains for the Big Board come from the NYSE's affiliated high-speed Archipelago system. That means the NYSE will move a step closer to shutting down the much puffed-up, computerized hybrid system it launched this year, exchange observers say. A spokesman for the NYSE declined to comment. http://www.nypost.com/seven/10282007/business/nyse_can_forget_the_hybrid.htm Only a matter of time before it is all electronic. With the reported shutting of the NYBOT by ICE, NYMEX possibly merging with NYSE and this, there won't be any pit traders left in NYC within a few years.
What is also exciting....are the new rule changes which will allow for lower commissions regarding the EU exchanges.... Hopefully Nasdaq can serve as a catalyst to get the costs of trading the EU markets...similar to that of the US... It would certainly be a welcome change to trading the EU markets... Perhaps within the next 4 years or so...hopefully sooner..very interesting to watch the process... The NYSE is showing the worlds exchanges that the electronic markets and low stocks transaction costs are coming...and are unquestionably going to happen....to all equity exchanges....
It's probably too late. NYSE volume is eroding rapidly... But it's not so much the big players like NASDAQ... There's extreme fragmentation among dozens of pure ECNs and bigger brokers like IB. In the last 9 months... IB has gone from crossing 3% of my trades to 13%. Everybody is moving in on the ludicrous Hybrid Thing... And SO FAR... it's ALL GOOD... Liquidity is up across the board. More liquidity = more volume = more profits.
If you have any links or additional details on this, I'd appreciate it. The only link I found was this http://www.finextra.com/fullstory.asp?id=15944 which only hit a small piece of the picture I believe.
What would happen if the nyse gets rid of hybrid? Would it be completely electronic then with no specialists or revert to the 'old' specialist system? -Guru
that would be awesome if they would revert back but i do not think that this might be a realistic assumption..
If anyone is interested: this all stems out of MIFID (Markets in Financial Instruments Directive) and is arguably the biggest financial change in Europe since the euro...
One awsome thread, much thanks to the op. Specialist come back baby!!! Like that kid says woof woof! appl yeehaw! That is what i will feel like if this pulls through. The specialist always gave me much more money than I pull with the new system intraday. I know alot of old day traders that cant kick it anymore due to the changes imposed this past year. I wonder if this will bring them back. I have faith in nyse, I hope they can get their shit together. Free brutdot for everyone! holy smokes, there is a blast from the past. p-
shoeshineboy wrote... If anyone is interested: this all stems out of MIFID (Markets in Financial Instruments Directive) and is arguably the biggest financial change in Europe since the euro... ........................................................................................... I saw this information in the WSJ ....This is indeed a very significant development...and I certainly hope that it happens sooner rather than later....as I am certain that you well know the possibilities that this will create for professional traders... This is similar in importance to when commissions became negotiable in 1977 in the US.... But since the electronic marketplace is already ready to commence...once the legal starting flags are waived...there are going to be a lot of very unhappy European brokers...What is going to happen to them ..has already happened to the US brokers...which radically changed the business...ie Merrill Lynch Wealth Management replacing the brokerage units... Would love to see LLCS and 10, 20 to 1 with .002 all in regarding all foreign equity markets....with no SS restrictions....hopefully some foreign markets will change sooner rather than later.....