I would like to ask a question if I may. Is anyone here scalping NYSE stocks for a living? I was wondering if this is something doable with a low commission broker like Interactive Brokers. Thanks in advance. There seems to be a lot of experienced traders on this site, with a lot of them willing to share their knowledge.
I'm pretty much a newbie myself but I did just come across a interesting book that describes scapling nyse stocks. The book is called "Day Trade Online" by Christopher A. Farrell. It was an easy enough book to read. Essentially, it describes a technique for scalping low volatility nyse stocks. Usually REITs, Closed-end funds, and Utilities. The idea is that if you're scalping, you should stay away from stocks that are too volatile.
To scalp low volatility NYSE stocks you would be going for 1/8-1/4 points at most. Therefore you would need to be scalping 2000-5000 shares to make any real money. Interactive Brokers will charge you $20 each side on a 2000 share order (.01c share) I disagree with the comment about scalping low volatility stocks. I've been scalping for quite a while now, and this market is so dull right now that even the most volatile nasdaq stocks (JNPR, CIEN) are not volatile enough for big returns...although it is much safer these days.
I used to. By definition (at least MY def.) scalp stock is like scalp futures bid at the "market" bid and offer at the "market" offer i.e I make the spread or the market in that stock (along with the specialist) When I was doing this in the Big Apple the most stocks were still an 1/8 market. Some were teenies but even at that you could do ok if the cost of trading was low. Soon we all learned that it's far more efficient to make 1/4 and halfs. I thin even at todays listed business this defines scalping !! BUT !! the big quake came at the decimalization and I think now it's far more difficult to do it. The specialist must fill public orders and when the book was in 10 1/2(2000) - 10 5/8 (30000). So it was 2000 to buy and 30000 to offer. BUT the specialist may have discretionary orders to buy a million and he want to get rid of the 2000 (your bid) by selling it to you from his inventory and take the 30000 offer himself and make a fake offer at 5/8. Trying to push the market lower and he will want to buy more. He has to fill public orders first (it mandatory !!!). So it was very well. Now it's near impossible because I am not sure what happens with the public orders in decimals and his game changed.
I make my living trading mostly nyse stocks. I do much more scalp related trading. It is all about reading the specialist. It is hard, and I know that, but you can definately scalp him. You just have to wait for there to be action. For instance, the day that nke blew up, I made 4 scalps on it both longs and shorts for .2-.55 1000-1800 shares each time. Dustin, it adds up, you don't need to do 5k at a time to pick off the specialist... and i really love decimals. If you get it wrong, you know that there is usually enough liquidity .02-.04 away... before, you had to loose at least .06 and sometimes .12... This is much better, and also on decimals, it is even easier to read teh specialist, especially b/c you can see him hiding
I how much do you pay in comission ?? It also adds up. Some firms give huge rebates and that's gravy. I just could not do it again. I remember when I was doing it it was cheap with volume rebates but you also pay for scatch trades my volume was 30-50K a day, and tha's not even that much. All in all it's tough. If you can do it more power to you.
I do way less than that.. Maybe 20k worth of nyse trades a day. And the 1c a share nyse transaction cost hurts. But i only pay 10 a trade.
Hello, I trade Nasdaq stocks primarily. I would be very interested to learn your technique for trading NYSE stocks...I know that they are a different animal altogether. For instance...I hear people saying they "read" the specialist but I do not really get what this means. Any tips or help you can provide would be appreciated. Thanks
Specialist is always trying to "move" the stock. See where he's moving to. He is mainly looking for air pockets in his book where there is no size. When he posts size, got he opposite way, he's getting long to move it to the size, watch the penny over increments, if necessary take a few hundred to clear off the last posting and see the real bid, b/c you're faster than he can repost a faker bid.
Will you clarify your thinking in the last post? Do you mean when the specialist posts size on the ask, then go long because you know he is accumulating stock for a pop in price? thanks.