tea, give it up, your nothing more than a black box trader who cant stand the specialist system because you cant get instant cancels YOU NEVER WILL..... LIVE WITH IT
very good point! And it is rediculous that the press has not fully explained the sordid history of market makers (or even that NAZ relies on MMs) and the upsides of the specialist system. In other words, the press has not provided a balanced view because that would take too much effort.
So why are average spreads bigger on NAZ? Why do all studies show that people get better prices on average on the NYSE? Why is there less volatility on the NAZ?
And don't forget that MMs play more games and back away from quotes, and that at least with the specialist you have ACCOUNTABILITY!! One person, one stock.
blah, blah, blah. The bottom line is that as long as Specialists or anyone else has both stability and profit motives concurrently, it can't possibly be fair..........
Another exerpt from the WSJ ___________________________________ NYSE May Revise Best-Price Rule By DEBORAH SOLOMON and KATE KELLY Staff Reporters of THE WALL STREET JOURNAL The Securities and Exchange Commission could soon deliver one of the biggest challenges to newly installed New York Stock Exchange Chief Executive John Thain: changes to a longstanding rule that many of its critics believe helps the Big Board maintain its dominant market position. The SEC's staff is recommending that the agency modify a rule requiring that markets always get investors the best price, even if it means going to a competing market to fill the order. SEC staff is recommending that in some instances, speed of execution should take precedence and markets should be able to ignore or "trade through" a superior price if getting that price would slow down execution. The recommendation is expected to be part of a broader package of market structure changes that the commission will consider later this month. Electronic markets, such as the Nasdaq Stock Market, which is controlled by the National Association of Securities Dealers, Instinet Group Inc. and Archipelago Exchange, have lobbied aggressively to have the "trade through" rule eliminated by the SEC. And Monday, California controller, Steve Westly, joined their efforts. In a letter to SEC Chairman William Donaldson, he wrote, "the trade-through provision is obsolete." The NYSE's competitors have long complained that the trade-through rule unfairly gives an advantage to the Big Board, which often posts superior stock prices but tends to fill orders more slowly as it allows human brokers to compete to find the best price for customers. While electronic markets like Nasdaq execute trades automatically and immediately, getting an order filled on the NYSE can take several seconds or even a minute. Some investors say they don't have a good sense of what the best price is at a given time, since the auction-trading system dictates that the best buy and sell orders change frequently after they are published for the public to see. Mr. Donaldson and other commissioners have said that traders shouldn't be forced to wait if what is most important to them is speed and not price. Some SEC officials say that the rule creates an inconsistency between floor-based exchanges and electronic markets that can at times disadvantage investors. Under the SEC's recommendation, automated markets would still have to get the best price from another automated market or match that better price. But if the superior price is on a market without automated execution, a faster market could trade through the better price as long as the price it gets is within a few cents. Mr. Thain, cognizant of the SEC's plans, is considering automatically matching some investors' stock orders electronically in order to avoid seeing the exchange routinely traded through by other, faster markets, according to people familiar with the matter. Mr. Thain has told regulators that he disagrees with the idea that there should ever be an exception to getting investors the best price and has said the SEC should instead mandate automatic execution. But the SEC clearly wants to modify the rule and the resulting shift could force the NYSE to lose out on filling some orders if it doesn't implement a more-automated system. At a well-attended meeting with NYSE members Monday, Mr. Thain, flanked by NYSE co-Presidents Catherine Kinney and Robert Britz, took questions from brokers and specialists about the plan to introduce more electronic-trading capabilities onto the floor. The dialogue was candid, said people who attended the gathering. "People are concerned about their livelihoods," said Jim Conlin, president of the brokerage firm Kabrik Trading, "but most people understand that we need to make certain changes." Still, he said, there's a feeling that the exchange's floor operations might not be under the microscope if not for last year's compensation involving former NYSE Chairman and CEO Dick Grasso. Members who attended the session also echoed Mr. Thain's hope that the automatic-execution enhancements might counteract attempts to roll back the trade-through rule on the part of competitors. The SEC's plan will also allow investors who always want to get the best price the ability to mandate that their order be routed to whatever market has the superior bid or offer. While staff is supporting the recommendations, the proposal could change if commissioners make modifications in the coming weeks. SEC officials said its plans are a measured response to a longstanding issue. While some NYSE competitors -- and at least one SEC commissioner -- want to see the SEC abolish the trade-through rule, the staff is not prepared to go that far.
Would the elimination of the trade through rule means that the regional exchanges will also get to participate in price improvement prints?
Price improvement is a scam. It's arbitrary & capricious. For every trader it helps, it hurts one or more traders. It is causing the demise of the Limit Order, and it was designed to line the pockets of the Specialists. IMO, it is worse than the 30-sec rule.
TEA, HAYMAN..... Maybe you should read this link or write on this link below and preach about NASDAQ because their ripping on NASDAQ below Read Me, Read Me, Read Me.......
Excerpt of an editorial from today's Wall Street Journal. _________________________________ A Better Big Board The new boss of the New York Stock Exchange, Goldman Sachs emigre John Thain, is making waves by promising a new era of electronic trading. Perhaps he realizes that the days of the old specialist floor-trading system are numbered, especially if the SEC finally decides to allow more open competition. The specialists who have a monopoly on the trading of certain stocks have been under siege of late, and with reason. They are accused of inserting themselves in trades, taking the place of their own customers, in order to make profits in their own accounts. Big institutional investors, such as Fidelity and T. Rowe Price, have been particularly pointed in their complaints. According to a confidential SEC report whose findings were disclosed in the Journal, the NYSE also does not satisfactorily police its specialists. The exchange lacks meaningful surveillance, looks the other way when specialists violate the rules and, when it does respond to violations, its punishment is not strong enough to deter future mischief. The result is that investors were short-changed by at least $155 million over a three-year period. All of this is affecting confidence in the NYSE itself. The Big Board's share of trading in its listed stocks has slipped from its decades-long average of over 81% to a tad over 78%. Six NYSE-listed firms have recently signed up with Nasdaq for dual listing of their shares. The problem is that this migration to other exchanges soon runs up against the SEC prohibition against "trade-throughs." This rule requires broker-dealers to trade at the best price -- whether bid or offer -- by routing orders to the exchange that is showing the best price. Since the NYSE shows the best price in a vast majority of cases -- a phenomenon that is itself a result of the trade-through rule -- the NYSE gains a monopoly on trading in its listed stocks. But here's the hook. In fast-moving trading, if the order isn't filled instantaneously, the price can change. Since the NYSE has a relatively slow trading auction system, traders can find that the price has changed in the time it takes to route their order and get attention from the specialist on the trading floor. Simply put, the best price showing on the exchange is often just a "maybe" price. In any case, price is not the only thing valued by today's traders. Some of them, especially larger traders, prize speed and certainty of execution; others care most about anonymity. These are advantages that electronic exchanges have over the NYSE's auction system. Our point isn't to endorse one system over another; it is that traders themselves should be able to choose which is best for their purposes. The trade-through rule currently prevents that competition. On those grounds alone it deserves to be abolished as an artifact of the 1970s before electronic trading. Nearly as bad, the existence of the rule freezes the institutional structure of the NYSE itself. Calls to improve corporate governance or tighten self-regulation sound appealing but they do not alter the underlying incentives of the specialist system itself. For those incentives to change, and reform to mean anything, competitive pressure is necessary. Imagine if the trade-through were abolished: If, as some predict, the NYSE's market share fell to 70% in one month, both the archaic specialist system and sloppy self-regulation would suddenly be competitive liabilities. The incentive for the NYSE to rapidly clean up its act would change overnight. The SEC is studying the trade-through rule and several half-measures are under consideration. None of these reforms go to the heart of problem. The Gordian knot solution would abolish the trade-through rule and put an end to the NYSE's monopoly.