specialist tricks this week

Discussion in 'Order Execution' started by ryanmitcho, Feb 14, 2003.

  1. I've had the same experience...a dow30 nyse specialist doesnt care about our 1000's or 2000's--but throw 5000+ at them and its a different ball game.
    #21     Feb 15, 2003
  2. NYSE Trader. Could you clarify what you mean by the diff treatment between 1000 vs. 5000 share order. Are you trying to imply that a dow30 specialist is less likely to try to game your order if it is 1000 since it is not worth his while BUT he will try to ream you if you have 5000 shares since if he is going to play some games he might as well do it on a 5000 share order? or do I have it backwards. Thanks
    #22     Feb 15, 2003
  3. Better treatment. First, according to nyse rules, bigger size takes precedence. Second, specialists want good liquidity and will generally take size more seriously because they want your business.
    #23     Feb 15, 2003
  4. nitro, I have often wondered why "ABOVE ALL, YOU GOTTA DO SIZE" is such an important statement to you. Have you ever explained that?

    I understand that cost of hardware, software, your own time, commissions, etc. are lower on a percentage basis if you do size, but I don't think that's what you mean. Does it have anything to do with the "red carpet treatment" you were talking about?

    Other than that, why would it matter if you trade with a little bit of your own money or a huge chunk of someone else's capital?

    Or are you saying no-one with a net worth < $1M should even think about opening a trading account?

    Please advise.
    #24     Feb 15, 2003
  5. Agreed, I've never liked trading IBM, nor NOC for that matter, but then again I love GS and most guys I know avoid him like the plague, go figure. As far as the various firms are concerned, I've never found a tight correlation between good/bad specialists (ie ones I can trade and ones I can't) and their respective firms. What's always amazed me is how easy a stock can be for a few weeks to a month, and then change completely, with no appreciable change in volume or volatility. An example for me was MMM in August, I could do no wrong. By mid October he wasn't even on my screen. Of course I have theories on this, most of which I'm sure are off base.
    #25     Feb 15, 2003
  6. shaq48


    conversations I had with the specialists assistants from SLK ( I rode the train with them for 2 years )was that the flow from the "crowd" was the major factor in the prints. When they have a size buyer or seller in the crowd they weren't as big a force without having to significantly increase their risk. Thats why the middle of the day gets so choppy..the floor brokers who make up the crowd and the size aren't busy. This lets the specialist move the price and make some money on the small traders. Its the size that keeps them honest and makes trading seem easier and less choppy.
    #26     Feb 15, 2003
  7. jem



    Good info, it all seems so obvious now, I am embarrassed I did not put that together myself. I just accepted that order flow was lower, but did not realize it was the crowd who keeps him honest.
    #27     Feb 15, 2003
  8. does anyone know if any of the crowds bids/offers get posted on open book to show the market or is it only reflected in his quotes????
    #28     Feb 17, 2003
  9. the crowd doesn't have to bid or offer until they want part of the print. they're right there.
    #29     Feb 17, 2003
  10. DaveN


    I've heard some talk of a "liquidity quote" coming to the NYSE. Supposedly, these will include and large quotes from the crowd.

    My understanding is that the quotes from the crowd are not in the specialists book. Presumably, many of them are holding those quotes rather than giving them to the specialist, so they can save a bit in the executions (I'm just speculating on this point, however.)
    #30     Feb 18, 2003