In all fairness, the MMs play worse games on NAZ and get away with more. Studies also show that people get better prices on the NYSE. Plus, it is good to have one person accountable for the rules, liquidity and stability of each stock (which is one reason why MMs can get away with much more on the NAZ, even though many MMs have been cited for major violations in the past). The only issue for the NYSE is that they should enforce existing rules.
"Price Improvement" is the biggest scam going on the NYSE. It's a zero sum game - for every trader helped by it, it hurts another. It disrupts the natural laws of supply and demand, and can be capriciously used by the Specialist at his/her whim, to help manipulate the market. Without question, it is the most misused and blatantly obvious poor rule that the NYSE permits. To me, that is the 1st order of biz to rectify. # 2 is the 30-sec rule, and # 3 is the (now) 5-sec Open Book delay. Fix these 3 blatant abuse rules, and we might be able to call this exchange "fair".
In addition to the above mentioned abusive rules fee the over 5 minute - specialist gets a commission is a abuse (afterall there is no such rule on the NASDAQ)
The way the rule works is that if an order is filled after five minutes have elapsed an addtional surcharge is charged to the trader usually 10.00 per thousand or a penny a share. This surcharge basically goes to the specialist. Fair? No.
Alot of those ECN's crossing down are the specialist themselves. A former compliance officer actually had to contact the exchange to find out if the specialist were able to execute orders from the floor. It took 7 months to get the reply but the answer was yes. In some of the thinner stocks I believe the specialist cross themselves to get some action, of course they never fill the cross.
I agree 100%, at least when you get screwed you know who it was and who is accountable. Does anyone have a complete NYSE rule book or bylaws, I ordered one a few years ago and it was missing all the order handling rules, those are for "Members only" I was told.
I have one and after getting wacked 60 cents in one tick a few times, looked for a clear and concise definition of what constitutes a "fair and orderly" market. All their terms seem quite ambiguous... either that, or I need to take a break from trading to get a law degree.