does their near zero risk come with near zero reward? http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=lab&sid=0&o_symb=lab&freq=2&time=12
I havent really watched X closely, but the DNA specialist employs a ton of tricks. Play with the level 2, fake size, etc, but bad fills is probably the thing that irritates me the most. SLB is a little annoying with the constant size being printed everywhere, but the stock has alot of volume. Vlo before the split was nasdaq like, the speed in which the size gets printed everywhere was amazing.
Lights, Although I agree that price action is driven mostly by market participants, there are cases in NYSE stocks that trades less than 5M shares/day where manipulation is obvious (let alone AMEX stocks). Otherwise, why to keep those individuals in the boots? The scum some people here are refering to (to which I subscribe 100%) is not always visible on a chart because it just takes a few cents move, fake quotes and bad fills here and there to take money away from weak hands. X is the best example I can think about. Explain me who in the world is going to take the risk to flash market orders for 10,000 shares or more on the NYSE quote other than the specialist. And why that doesn't happen for all NYSE stocks? It's so stupid that I don't even understand why he does it. Probably there are always fresh traders ready to take a hint at that stock. I can take other examples, this is just to give you an idea. The fact that LAB stock went down (and that specialists are making less money) doesn't mean the rules of the game have changed. Specialists have an interest in the trade, which means they can make money for their own account. That extra money has to come at the expense of somebody else and today there isn't much retail volume going on. <i>4-12-05: In all, 15 individuals representing all five of the top specialist firms have been indicted on securities fraud charges by the U.S. Attorney in New York... The specialists were accused of improperly stepping ahead of customer orders, using minor price differentials to benefit their firms...</i> http://www.forbes.com/services/2005/04/12/cx_em_0412specialists.html
What do you make of X's fake size? I did some studies of that phenomenon, and the price action doesn't always necessarily reverse. He's doing something -- I mean, trying to scare people in one direction or another. But just how far he'll take it is something I haven't quite figured out yet.
He will take in ZERO, and almost noone falls for that idiotic trick anymore. If anything, you see more offers come down to sell to the few suckers and the price action goes back to normal. They are just scalping daytrader orders for spreads, nothing more. Wake up people, with the institutionals taking a serious stand against specialist abuses so guess who the next target is going to be, especially in this environment with an ever increasing trader/investor ratio.
BTW, there is market manipulation in NASDAQ stocks too, of course, but it's different because no market maker is (in general) in full control of the order flow. I've been trading Naz names for a few months now and the only form of manipulation I've noticed is the classic shake-out: after a breakout, "somebody" will try to counter-trend the move with enough size to generate momentum but if there are real buyers the stock will bounce back fast. Sometimes it's so fast you don't even have the time to think about dropping your size. Besides, in terms of fills, what you see is what you get. Then again, there is no way you can tape read a NASDAQ stock the same way you read a specialist.
i hear your point, but know the multitudes of traders who have also been indicted. the tape and chart reflects all of us, not just the specialist.