Shorting on the NYSE

Discussion in 'Trading' started by gh1, Nov 27, 2001.

  1. There is really no reason to ever use a market order. We get price improvement on about 25% of our listed trades when not using NX, using limit orders. Market orders are generally a rather foolish mechanism (by definition).
     
    #11     Nov 27, 2001
  2. Don

    There have been quite a few different discussions on this. When I am trading momentum I will use market orders when I can measure that the momentum will last for greater than 5 minutes. That type of momentum limit orders won't be filled on the NYSE. On NASDAQ you would actually have to use selectnet to hit a market maker heavily away from the market.


    Market orders/limit orders both have benefits and drawbacks. It depends on the situation. The strategies you teach your traders it doesn't usually make sense for the market order. There are quite a few times I would have never been able to trade if not for market orders.


    Robert Tharp
     
    #12     Nov 27, 2001
  3. "get human greed and inefficiency out of the middle. Thats my opinion."

    NO, NO, NO!!!!! I worship human greed and inefficency.

    :D
     
    #13     Nov 27, 2001
  4. dottom

    dottom

    gh, I only use limit order strategies when shorting stocks. Hence, some momentum strategies where I use stop/market orders on the long side I do not use for shorting. It's one of the drawbacks of being a retail player.
     
    #14     Nov 27, 2001
  5. ddefina

    ddefina

    Being greedy myself I want first dibs, not second. I agree, without those two vices there would be no advantage.
     
    #15     Nov 27, 2001
  6. Your points are, of course, valid. The point I am trying to make is: Since the NYSE Specialist is the only person who can execute market orders (thus causing them to be "batched" - which can take some time), when limit orders can be executed quickly by the NYSE clerk, we recommend that our traders use limits "past NBBO" pricing to facilitate the trades more quickly. Since we generally get price improvement anyway, it gets the job done a bit more quickly in most cases, and the pricing is usually better.

    Market orders on the NAZ are a whole different story, as you well know.
     
    #16     Nov 27, 2001
  7. Htrader

    Htrader Guest

    Hi Don,

    I thought that market orders on the NYSE had priority over limit orders of the same price and thus market orders would always get filled first. Now you're saying that limit orders can get filled before certain market order?
     
    #17     Nov 27, 2001
  8. nope market orders will be filled first

    Robert
     
    #18     Nov 28, 2001
  9. I admit to not being that expert on listed trading. However, is there any circumstance short of an all out panic exit that would cause you to use a market order, particularly on a thin stock? Chasing momentum? I think you will almost always get filled at the end of the move. It's not always the fault of the specialist, there could just be an air pocket. Who wants to sell when it is obvious the price is rocketing higher?
     
    #19     Nov 28, 2001
  10. I short on the NYSE with market orders all the time. I rarely get a fill that's outside the bid-ask spread. I've never had success shorting on a limit at the NYSE. The biggest issue is the slow processing of market orders - in particular when the market in moving
     
    #20     Nov 28, 2001