The question is not whether the specialist pays individual attention to each small order, in a scheme to cheat small traders. The question is whether or not small orders are unfairly processed by specialists, either because they do not follow the rules, and/or because the rules themselves allow and conceal specialist victimization of the public.
1.) Who actually MATCHES the bid and offers? IF it isn't the specialist as it sounds like everyone is saying, is the best bid and best order matches automatically electronically? If so, is it being matched so that a slightly higher bid is matched with slightly lower ask so that the specialist makes the spread? Or does the specialist only make the spread if he makes a round turn (he fills his own bid and offer)? 2.) Also, why is hte specialist always required to have a market bid/ask quote if during trading hours it's mainly just bids and offers bieng matched (and therefore his quote is irrelevent since he's not trading, just matching)? 3.) Finally, aren't most trades 'Market orders'? If a market bid and sell order comes in, how does the specialist decide where the market is to match them at? The last trade? In addition, if yhou're not placing a 'market ordre' but are placing a bid or ask, is this normally a limit order or is there another way to bid/ask (cuz i thought limit orders were normally much higher or lower than the market in order to lock in profits, not place competitive bids)? thanks guys!
just jameson i break it out occasionally on good outliers. i'm basically working all the time, i don't think my trading knows the diff
From another post...sometimes a little "knowledge" can be very helpful, eh Mav? (Just having fun). LOL. We are in total agreement on most of this thread...there is a lot of confusion about Specialists. As you know (the others may not), but I have personal friends who are current Specialists and ex-Specialists. They are extremely cautious these days about every trade...they cannot initiate upticks or downticks...they don't give a tinkers dam about the small orders, and for the most part, provide liquidity and match up orders. They do try to make money of course, but "they" cannot do anywhere near what some traders think they can to accomplish all this. Some are better than others, of course...I tell my people to simply pick another stock to trade if they feel they have a "bad" specialist. If you lose money playing blackjack at the Bellagio consistently, try playing at the Mirage...if that doesn't work, perhaps you need to question your blackjack skills (silly but applicable analogy?). (And to our new friends on this thread......Mav and I may disagree on a lot of things, but he is a true trader and knows his stuff). Don
1. Most is done by the assistants (see #3 below). DOT (nx sometimes). 1a. That would be nice for him, but no..he goes long and short all day long for the most part. 2. He will "accomodate" at times, but often simply matches trades and steps back, as long as the market is "fair and orderly" 3. Most orders are not market orders...institutions use limits. Limit orders can be filled by assistants, market orders have to be "matched" or "batched" by the Specialists themselves. Mav? You got more on this? Don
not sure .. can't they just tap their floor broker pal next to them if they want to initiate a tick in a direction while an order is on hold