I actually can and do make money on trading the NYSE, so I probably would relax with all the assumptions. Also, if every other market in the entire world has gone electronic years ago, it seems to me that that might be the future of trading and not the old school auction market. Oh, and if the news is so bad on a stock that the bids are 10pts down on a NASDAQ stock you should probably also assume the same would happen on a NYSE stock. You ever see stock get halted by an imbalance, can you get out of that any easier then a stock on NASDAQ. For all you guys who think a specialist is bidding for a stock when a million shares comes in the market to sell, I think you might be wrong. Well maybe he is bidding but it probably is for 100 shares every quarter down. You know where he will be loading up? Anywhere from 0-.50 from the bottom. That's right. Only when it is most profitable for him and his firm will he be providing an orderly market.
Tell us something we don't know. Did you even read my post? All I am saying is that MMs disappear off of the side the stock is moving towards, whereas the specialist is always there. Obviously we know that a specialist is not going to come in a support a stock by himself that's ready to tank. i.e. Have you ever seen a NYSE stock take off like QCOM did in 1999? You just don't see that kind of volitility in listed stocks. Now don't get me wrong, I am in no way defending these prick-specialists; I'm just saying that there is way to profit off of an auction market system. Just ask all of the prop firms that restrict their trading to NYSE stocks.
This thread kills me, NYSE equitie traders crying about the specialist. FOR CHRIST SAKE...grow up.....I traded with the those specialist for years. Try trading options, where they have a guideline, only a guideline that they can hold ur order for up to 3 minuets. And if they hold it longer they can call "fast Market", at which time, if they fill your order(even a cancel order) 5 even 10 minuets later, its all legal. Or they can decide to fill you and bust your trade hours later. not to mention all the other tricks the MMs in the PSE< CBOE< AMEX< pull. When i was at schonfeld, trading NYSE along side Nasdaq, i remember those who could not make money.....blaming the Specialist........only to relize later that they could not trade, at all. the SPECIALIST are not to blame......you are to blame if you dont understand how the specailist work, in the equites you trade. And i know your not loading up with 30 positions....so, learn the games they play. Fidelity is just using the Specialist to blame for their failed attempt to creat profits for clients. What ur going to see now are all those brokers and all those traders that trade for many funds finding excuses and pointing the finger at everyone but themselves.......because the are all pretty much CLOWNS.
I am in favor of the spec. providing more of a compliance/mediator role.. Give him a decent salary around $200K hire him an assistant for $85K and let them get paid a bonus on how well they match up the crowd buyers and sellers, WITHOUT making $$$ in their own account and whipping the stocks around... this way all the small stuff pairs off electronically and he can manage the big blocks.....
I don't even actively trade equities, but no trader should have to 'learn the games' specialists play. What a farce! Specialists are an unnecessary tax on the system. Many traders are profitable despite the tax, and perhaps a small minority who pursue specialist-dependent strategies are profitable because of it, but the net-net is that specialists needlessly tax trading activity. I've traded liquid and illiquid equities in emerging markets, almost all using electronic systems, and I know first hand that the argument 'specialists are necessary' reflects either ignorance or dishonesty. If anyone care's enough, there is a book "The Innovator's Dilemma" by C. Christensen, that indirectly describes why the NYSE has been defending the trading floor.
This should make some folks happy: http://www.marketwatch.com/news/yhoo/story.asp?guid={D72359B4-4474-4781-982B-185147EDC37A}
=== Good read on this forum. Catchy title -''NYSE to discipline Specialists'' Would rather have the Specialists running it than Fidelity also Chasinfla; however Fidelity helped & paid ''General'' Kevin Haggerty. Bloomberg thru DISH TV noted this am ''five fined''; in the same news context. Interesting the Bloomberg news ,later addition, has the fines a done deal. ====== Bloomberg news also had an interesting addition,something about ''restitution'', separate from fines.
I can't help but thinking that if a blue collar butcher were caught resting his thumb on the scale when he weighed someones meat - he would get his business shut down in a NY minute. But if a Long Island specialist gets caught resting his thumb on the "send mode" button and causes stock orders to dog-pile up and not match-up he can get away with it until courageous reporters put enough pressure on the so called "self-regulators" that they are embarrassed into fining these country club dandies. And where is NY AG. Elliot Spitzer in all of this? He is all over out-of-state mutual fund companies when they do something wrong but rather silent on wrong doing done by specialists - many of who are probably his biggest campaign contributors and part of his weekend social set. From today's NY Times: _________________________________ Big Board Plans Fines for Specialists By FLOYD NORRIS and LANDON THOMAS Jr. "It appears that at least some of the violations stemmed from a feature of a Big Board trading system that is used by the specialists, according to people briefed on the investigation. When a specialist puts a terminal in "send" mode to make a trade, trades coming in electronically from customers could pile up for a few seconds and then arrive simultaneously. Confronted with several trades, the specialist had a "negative duty" to not trade himself and instead to pair customer orders as possible. But had the trades arrived one after another, the specialist would have been free to execute each one, with the specialist taking the other side of each trade and profiting from the spread between the bid price and the asked price. It is possible that specialists thought that regulators would not be able to tell that was not the case."
This is an interesting perspective but you must consider this: business regulation is supposed to protect those who cannot protect themselves. Professional traders are 'sophisticated' in the business -- or presumed to be -- and therefore able to fend for themselves. If the butcher cheats another butcher, he can sue civilly. If the butcher cheats your unsuspecting grandmother, the state assumes the role of advocate. Or something like that.