Will new NYSE nx rules bring back trading?

Discussion in 'Trading' started by silk, Feb 15, 2004.

  1. silk


    This is a copy of a post i made on another thread. I thought it warranted its own thread. I'm wondering if the rule changes allowing more than 1000 share NX orders will encourage the big boys to start trading the 5k and 10k order sizes again. I'm thinking that the black box automated trading systems will be enticed into trading size as well. For each position they open, they will have to close out later in the day, some at inoppurtune times giving us PROFITS!! I could envision day trader open interest increasing many fold.

    The problem for day trading NYSE as i see it, is that because volatility is 50% of where it needs to be for anyone but the "MASTER" trader to make money, "day trader open interest" has dropped to near zero. Even specialists don't trade much. You need day trader open interest to create puke outs (in size 5-10k shares) at the inflection points which allows the savvy daytrader to get a "free money" entry or exit. I'm hoping that the new rules will entice more day traders (even if its the computerized systems, these trades have to be unwound later in day creating more order flow) to take positions. I'm hoping this will bring back the 5k and 10k order sizes.

    You need more orderflow in a 2 minute period than the stock can handle creating price abberations. You also need the order flow in a context of volatility(so maybe order flow alone won't help??) so no one wants to take the other side of the trade accept for the savvy day trader who knows a good price when he sees one.

    The number of favorable entries in stocks has declined from the 10,000's a day, to mabye 50-100 per day.

    On a borring friday afternoon in 2002 i could easily tally up some amzing profits. All one has to do is pull up a 10 minute chart of a typical high beta midcap stock from 2001 or 2002 and compare it to a chart from this week to get what i'm saying. You will see a 30 cent range compared to a 12 cent range. Hopefully the new rules will spawn more order flow that will serve to increase volatility in individual stocks.

    For trading to be good you need volatility and large orders. Right now we have neither. Large orders create the short term pricing abberations in the context of the overall volatility. It could be that large orders alone without volatility will still mean trading sucks. But maybe large orders on their own will increase volatiilty some what?? At least maybe the way will be paved for better trading with any uptic in volatility.

    Any comments?? Am i dreaming to think day trading will pick up?
  2. ertrader1

    ertrader1 Guest

    any comments: NONE

    Am I dreaming that day trading will pick back up: IMHO YES
  3. Bluedog


    IMO short sale restrictions and not having bullets may be a bigger obstacle than NX rules right now...
  4. I say no because its the real volatility in the market which is the problem,,, its the 2 or 3 point ranges in the spoos for the 1st hour that are the killer.

    I was on the phone with a officer from a major bank at the CME this week, explaining how i have to work harder and harder for less these days, he makes considerably more than i do but said somthing I appreciated hearing......

    he said "you have to understand you have the best job in the whole world, dont ever forget that and hang onto it as long as humanly possible.... while your starting a fire and coffee while firing up your atm machine at home im fighting traffic, politics and customers".

    enuf said, I dont care what it takes, I will be flexible and work harder, this job beats pro ball
  5. shneed


    I think that it's a double edge sword. On one hand it will be easier to buy size if you are fast, on the other hand I see a lot of frustration if someone is faster. Now when you see a 5-10k block on the offer and the stock is moving, you know that because of the NX rule you will most likey get filled for 1000 shares, after the rule change I think that you will have to be much faster to get in and get out. Tape reading will become much more important. Only time will tell though. I am sure that my volume will probably double in the beginning, and then even higher.

  6. Mecro


    The new NX rules will only make it worse. NX monkeys will continue to ruin trades at a larger scale.

    Only rule that can help me out right now is the new short sale rule. Once that becomes active, if ever, I'll be very happy.
  7. How will the new short sale rule work and when will it pass?
  8. These rule changes are only "proposals".........they are fictitious and I assume any proposal that passes will make things more and more difficult for us......ILll assume if they do pass thtat liquidity will dry up to nothing as opposed to the current next to nothing......I am waiting for the unicorn of a list of stocks no longer subject to the uptick rule.......whare the fuck is it?......no one seems to know ANYTHING.......one lie and one stick in the eye after the next.

  9. Someone had a good valentines day...

  10. nitro


    I do think it will, but here is the problem. The time frame to take advantage of it will be shorter than it used to in some cases, so you will have to adjust your style (time frame) to half way to what it used to be to what it is now.

    The reasons are programs. You have to know when they may come in now more than ever.

    #10     Feb 15, 2004