I thought we use to have more depth in big stocks at each price point, not falling $5 or $20 on 10,000 or 50,000 share like Apple did right before the Open! Maybe I don't fully remember how there was nobody to buy your shares back when I was still a kid. The Market Makers who refused to pick up their phones causing stock prices to fall off a cliff. There's a story about a JP Morgan Analyst who bought his Mom and Sister enough cheap Puts that made his Mom and divorced Sister $12 million each. He quit the Trading and never returned, even after reading a story by him in 1997 he still refused to return to the Stock Market. Rumors were he made over $50 million, maybe more, he said "I knew this was not my line of work, this was the only time I could become this rich and I needed to take this money and run!" (Morgan Analyst who made a killing on Black Friday.) You can read through any period of Wild Stock Markets only to read about people doing a shoddy job of making a market in their stock! "At the same time, the staff found that so-called upstairs firms - the big investment banks and brokerage houses that usually help keep markets orderly by buying shares for their own account to accommodate institutional customers - did little to ease the selling pressure Oct. 19, when the Dow-Jones industrial average fell 508 points, or 22.6 percent. As a result, specialists were asked to purchase most of the shares offered for sale that day. Many were overwhelmed. ''Specialists were confronted with extraordinary imbalances that required unprecedented capital commitments, and the upstairs firms did not provide the anticipated liquidity,'' the S.E.C.'s staff wrote. It added that ''diminished upstairs firm participation'' was continuing, placing greater strains on the specialist system. More Volatile Since Collapse In its report, the commission staff found that the stock market had become even more volatile and less liquid since the Oct. 19 collapse." "http://www.nytimes.com/1988/02/04/business/stock-specialists-viewed-as- jittery.html The NYSE Specialist were front-running the Whales as long as we can remember! HFTS are only doing what their Masters taught them! A Likely Story Specialists are a symptom of monopoly markets " People unfamiliar with the way the NYSE works will ask you how the specialist stays in business, and why. Even those who know nothing about stocks and bonds have heard the advice "Buy low and sell high," and they find it tough to believe that New York Stock Exchange specialists have made a good business out of doing the opposite. But the seven specialist firms do make a good business somehow, and their managers have been so enamored of the business that they have bought out 43 other specialist firms in the past decade, paying richly for the last few seats in a game of musical chairs. Now it's beginning to look as if they bought powerful monopoly positions in the buggy-whip business. Shares in two firms that specialize in being specialists were down by more than half last year. It's not hard to guess how the specialists really make a living. College kids of our acquaintance find it obvious. Even the New York Stock Exchange's trading police have figured it out. Last year they announced disciplinary proceedings against five of the seven specialist firms for trading ahead of public orders. Simply put, they bought low or sold high while holding back a big order that assuredly would make the specialist trade profitable within a matter of seconds" http://www.barrons.com/articles/SB107369262728222500?tesla=y
I forgot I read this story back in 1999, might see a few of my posts here. This is the story I was looking for about the Specialist and ECN debate on Silicon Investor Message Board, only part of the story. "Electronic Trading Threatens Big Board, `Specialists' Corso swaps the coat of his blue pin-striped suit for a black trader's jacket and crosses the street from his office to the New York Stock Exchange floor. ``I'd be lying if I told you I didn't have butterflies in my stomach,' says Corso, a 37-year-old managing director at LaBranche & Co. For two days his firm has been ``leaning against the wind' -- buying shares in Merck & Co., Lucent Technologies Inc. and AT&T Corp., among others -- as part of its mandate as an NYSE ``specialist' to keep stocks trading smoothly even as prices on the Dow Jones Industrial Average tumbled 231 points one day and 185 the next, a 4 percent drop in all. As a result, LaBranche is holding about $150 million of stock, a big position for a firm with $250 million in capital. About $50 million is tied up in Tyco International Ltd., which slid 6 percent the previous day after a fund manager suggested the electronics company inflated its profits. Now, on Oct. 14, Corso is facing a Tyco ``breakout,' an avalanche of sell orders and no apparent buyers. Muscling past brokers on the Big Board's floor to Post 12, the oval kiosk where trading in Tyco takes place, Corso eyes computer screens flashing sell orders -- and faces the prospect of a precipitous plunge in the world's largest maker of electrical connectors. ``Tyco is getting ugly,' Corso mutters. ``Slow it down, slow it down! Come on, this is a disaster!' " The fate of a single stock seems but one worry these days for the NYSE's 480 specialists, the traders who maintain markets in specific stocks -- and try to make money for themselves in the same stocks. Fast-growing electronic trading networks have begun to threaten the Big Board and this shrinking core of specialist firms. Half the specialist firms in business a decade ago have been swallowed by rivals. The 27 left are so stretched for money that some people question whether they could weather a market slump. The Big Board plans to extend its hours and to trade stocks priced down to the penny, instead of in fractions, casting even more doubt on the already-uncertain future of the specialists." http://www.siliconinvestor.com/readmsg.aspx?msgid=11825587 `Dinosaurs'
You notice the Specialist use to take a more active role buying stocks and trying to create a balanced Open from all those Market Orders received. I read a paper on the Tyco story, much bigger than this one, those Specialist had balls back than and now they run from any form of risk, they are walking away from their job leaving less liquidity at all price points, just my humble opinion. Today on my SUNE Puts Trade, that stock was falling in a ugly way, they kept that under wraps till the last hour where they blew it up! When I started in the stock there was 20 million shares, by the time I sold my Puts it hit 72 million shares crushing bids of 150k like nothing! I saw a 500k order hit like nothing! What do you make of these chip stocks getting crushed?
I'm just a conservative S&P 500 index investor. I made my last purchase at 1806 with the idea I would buy more if I could get a better price.
How did you like today's 619 point jump? Were back to the ways of 2000-2002 when the Market would make this type of wild jumps and you had to prepare yourself well. During the downturn in 2002 I watched some buying S&P 500 Calls in a massive way, he made so much coin, while SP500 and QQQQ were near their final lows, in a exhaustion capitulation you could feel the Bear Market was over. The QQQQs shooting past my LL2 screen at $17 I think and that's when we started finally ending the wildness. I was late to the Market today because I have positions I been building up, WFC, BAC, FIS, HAS, HRL, TSN, POST, GPN, V, MA, ICE, CMG, ect.
ALJ, NTI, (THINKNG ABOUT WETF after Citibank's "Double Downgrade!" We have lots of bargains, I thought of selling my MSFT Jan $41s (100 contracts at almost $4.00), I still see Mr. Softy at $47 even when the selling began and Aprils. There are so many good stocks gone bad but we all know this does not matter when the panic selling and Geopolitical theme changes. Look how far down the Earning Revisions went on Coal, Copper, Oil, Steel, Potash and lots of other Commodities. If China the great new consumer is slowing, even YUM and others with exposure might get pounded. In the United States stocks like these are doing great, a treat from all the high fliers. YUM, HRL, PZZA, DRI, LAMR, and others, not trying to corrupt your trading mind!