Difference Between Poker and the Stock Market - Page 11

ArturiusX · #**101** 10-19-2007, 10:55 AM

I trade e-mini's. By far the most comfortable interestment, although I have been known to take a few commodity trades, but thats more to mess around with a few ideas. Commodities are a different beast. I'd never mess with individual stocks, although I do know guys who do, their [censored] is very different thinking to what I do.

You gotta love option expiration friday, its pretty frantic right now.

Henry17 · #**102** 10-19-2007, 10:55 AM

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Always fun when traders get into pissing contests. Traders probably have worse ego problems than pokers players, lol.

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I think "traders" is a very loose term there. I agree with 99.9% of what Stephen has posted. I'm finding the whole series of these threads funny. There seems to be a lot of dreamers on here.

Foghatlive · #**103** 10-19-2007, 11:46 AM

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I've daytraded for over 10 years and can tell you for certain that the game is approaching unbeatable in the stock market

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LOL

I recently read an article about how daytrading was making a comeback because of the recent bull market.

It just shows how you have to read between the lines. The article was really saying that most day traders have gone bust and that some fresh meat is needed.

ArturiusX · #**104** 10-19-2007, 11:51 AM

Some people say poker is unbeatable at the moment. Some adapt, others perish, the usual story of a game like this.

A good blog about hedge funds:

http://hedgefund.blogspot.com/

CrushinFelt · #**105** 10-19-2007, 01:35 PM

Actually the example with the $100 bill is still pretty funny to me. My Game Theory teacher did it on one of the first days of class before people started thinking ahead about what they were getting into.

Foghatlive · #**106** 10-20-2007, 12:39 PM

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After the collapse of the NASDAQ(which BTW accounted for 80% of the trades over the counter on-line,as the NYSE was tougher with the specialist involved).

GL
~stephen

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If it's not too much trouble, could you explain the difference between OTC trading and trading w/ a specialist involved.

There's surprisingly (or not surprisingly) little information on this available to those of us not directly in the biz.

You could go into Barnes & Noble, grab 10 investment books at random, and there's a high probability you won't even see the Specialist mentioned.

dazraf69 · #**107** 10-20-2007, 02:37 PM

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In general, the reason for which a stock is traded over-the-counter is usually because the company is small, making it unable to meet exchange listing requirements. Also known as "unlisted stock", these securities are traded by broker-dealers who negotiate directly with one another over computer networks and by phone.

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member of an exchange who acts as the market maker to facilitate the trading of a given stock. The specialist holds an inventory of the stock, posts the bid and ask prices, manages limit orders and executes trades. Specialists are also responsible for managing large movements by trading out of their own inventory. If there is a large shift in demand on the buy or sell side, the specialist will step in and sell out of their inventory to meet the demand until the gap has been narrowed. There is usually one specialist per stock who stands ready to step in and buy or sell as many shares as needed to ensure a fair and orderly market in that security.

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http://www.investopedia.com/

stephenNUTS · #**108** 10-20-2007, 05:22 PM

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After the collapse of the NASDAQ(which BTW accounted for 80% of the trades over the counter on-line,as the NYSE was tougher with the specialist involved).

GL
~stephen

[/ QUOTE ]

If it's not too much trouble, could you explain the difference between OTC trading and trading w/ a specialist involved.

There's surprisingly (or not surprisingly) little information on this available to those of us not directly in the biz.

You could go into Barnes & Noble, grab 10 investment books at random, and there's a high probability you won't even see the Specialist mentioned.

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Hey Fog!

I just read your request,and I will gladly respond by tonight/tomm morning(i am going out right know),as it will be much more accurate than if I just blurb a three sentence answer

Stephen [img]/images/graemlins/cool.gif[/img]

stephenNUTS · #**109** 10-20-2007, 08:26 PM

This a "very basic" definition, of a specialist and a market maker:

A specialist is a dealer associated with a NYSE specialist firm.They are one of the primary players of any trade on the exchange.

A market maker OTOH is a broker-dealer who acts as a go-between with the trading of shares by posting bid and ask prices along with maintaining an inventory of shares mainly on the NASDAQ,over the counter markets,and third markets as well.

A specialist is a type of market maker,that is a assigned a particaular stock to insure a liquid and effecient market,providing an orderly exchange between a buyer and seller.If for some reason there is no buyer/seller in the particular security they are assigned,it is their obligation to make a fair market by buying your stock,or selling your stock at a fair price.

It is also important to know that,only ONE specialist is assigned to each stock traded on the NYSE.

At one time about 10 or so years ago ,there were over 30+ specialist firms I beleive,and after a major corruption/scandal investigation...they either went out of business,went to jail,merged with the bigger firms,or got bought out

There are now about 7 major specialist firms on the NYSE,while the Nasdaq has well over 275 market makers. The NYSE is an auction-based market where traders on floor of the exchange, trader to trader, telephone orders as well as electronic orders are executed
This system is still known as the "outcry system".

The old "yelling and screaming" you have probably seen,is actually still in place on the NYSE floor.However ,competion they have faced from other exchanges/markets have forced this old school system to catch up and adapt....and their recent merger with Arca(an ECN) confirms that.

This has made trading of their members shares,abit more electronic/computerized and obviously more liquid IMO which is imperative in this day and age

The Nasdaq, on the other hand, is strictly an electronic exchange,where most firms have trading desks making bids and offers,on just about any stock they want.No one firm,makes a primary market in any one stock.
Most of the over the counter MM's,have their primary group of stocks they make a market in ..and the bigger,large cap stocks can have 20+ MM's each day.

This is the TIP of the iceberg ,and if you have further questions...feel free to ask!

Stephen [img]/images/graemlins/cool.gif[/img]

Foghatlive · #**110** 10-21-2007, 02:54 AM

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The Nasdaq, on the other hand, is strictly an electronic exchange,where most firms have trading desks making bids and offers,on just about any stock they want.No one firm,makes a primary market in any one stock.

This is the TIP of the iceberg ,and if you have further questions...feel free to ask!

Stephen [img]/images/graemlins/cool.gif[/img]

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Thanks for the info, Stephen. Greatly appreciated. Reading this thread made me realize that I need to learn more about the nuts & bolts of the market, as opposed to just trading strategies.

As far as that quoted paragraph, perhaps I'm missing something. The way it's described, it seems as though several firms make markets for the same stock. If that's the case, how is there consistancy in the stock price? One firm could be selling a stock for 40; another, 35 etc..

Thanks again

Brett aka Foghatlive