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  #11  
Old 11-10-2007, 07:36 PM
Your Mom Your Mom is offline
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Default Re: Question about NASDAQ Market Makers

good stuff guys and this is what I deal with all day long. People entering in dumb orders and complaining when they get taken to the cleaners. Most of what happens is completely legal and makes perfect sense once you understand it. You have to be smart when entering in your orders and you have to be cognizant of everything that can affect prices in the short run.

There are a few things that could be done that would help the retail investor. Getting rid of Reg NMS would be a start. Blowing up the AMEX would help too, though their influence is getting smaller and smaller as Listed Securities are being much more heavily traded by NASDAQ (INET) and other ECNs.
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  #12  
Old 11-10-2007, 07:50 PM
SuperWhale SuperWhale is offline
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Default Re: Question about NASDAQ Market Makers

[ QUOTE ]


There are a few things that could be done that would help the retail investor. Getting rid of Reg NMS would be a start. Blowing up the AMEX would help too . . .

[/ QUOTE ]

Can you explain these two parts?
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  #13  
Old 11-10-2007, 11:58 PM
Your Mom Your Mom is offline
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Default Re: Question about NASDAQ Market Makers

[ QUOTE ]
[ QUOTE ]


There are a few things that could be done that would help the retail investor. Getting rid of Reg NMS would be a start. Blowing up the AMEX would help too . . .

[/ QUOTE ]

Can you explain these two parts?

[/ QUOTE ]

Reg NMS are new regulations in place that determine how orders have to be handled and executed by market makers. There are several exceptions that market makers can use to trade thru the normal retail order. The biggest scam exception that the listed exchanges (NYSE and AMEX) use is the Slow Quote exception. The NYSE or AMEX will go into what they call slow quote mode and then they are able to trade through your order even if your order is part of the NBBO (National Best Bid or Offer). Here's the definition of a slow market according to the NYSE:

The market becomes “slow” or converts temporarily from a Hybrid Market to an auction market so as to
enable specialists, floor brokers and customers to interact with quotes and orders manually, with the objective
of enhancing liquidity, reducing volatility and discovering price. Certain market conditions temporarily trigger
a slow market, including gap quotes, trading halts or reaching LRPs. The slow market can be traded through.

In other words, they can go to slow quote mode whenever they want which enables them to do whatever they want. What a [censored] joke.

As for why the AMEX sucks, just trust me that they do. Their specialists do whatever they want, they don't honor their own quotes, their systems crash all the time, they just plain ass suck and I hate everything about them.
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  #14  
Old 11-12-2007, 01:04 AM
pig4bill pig4bill is offline
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Default Re: Question about NASDAQ Market Makers

Yeah, AMEX blows bigtime and the specialists are often crooks. They can "take" your order off an ECN and not fill it.

Ticks me off too, because AMEX has so many garbage companies, which is what I play the most.
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  #15  
Old 11-12-2007, 01:34 AM
pig4bill pig4bill is offline
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Default Re: Question about NASDAQ Market Makers

[ QUOTE ]
I work in the order room for a large online broker. It's my experience that specialists are a bunch of scam artists. It's also my opinion that stop orders at any time and market orders at the open are for complete suckers.

[/ QUOTE ]

Not always true. Market orders pre-open on the NYSE all have to be filled at the same price.

Say a stock had good news and a lot of people want to buy it. The specialist doesn't have much in inventory and is going to have to go short to fill all the buy orders. He wants to be able to buy it back at a lower price to make a profit on all the shares he went short at the open. So he gaps it up at a higher price than it should have at the open. All the buyers are filled at the open and people that held it prior will sell into the gap to take profits. As it drops, the specialist buys to cover his short. This is often referred to as "gap and crap". Putting in a market short order pre-open gets the same price as the buyers, since all orders have to be filled at the same price. So I'm basically riding the specialist's coattails. Sometimes a stock will "gap and go", but that takes a very strong stock indeed.
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  #16  
Old 11-12-2007, 11:50 AM
Your Mom Your Mom is offline
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Default Re: Question about NASDAQ Market Makers

[ QUOTE ]
[ QUOTE ]
I work in the order room for a large online broker. It's my experience that specialists are a bunch of scam artists. It's also my opinion that stop orders at any time and market orders at the open are for complete suckers.

[/ QUOTE ]

Not always true. Market orders pre-open on the NYSE all have to be filled at the same price.

Say a stock had good news and a lot of people want to buy it. The specialist doesn't have much in inventory and is going to have to go short to fill all the buy orders. He wants to be able to buy it back at a lower price to make a profit on all the shares he went short at the open. So he gaps it up at a higher price than it should have at the open. All the buyers are filled at the open and people that held it prior will sell into the gap to take profits. As it drops, the specialist buys to cover his short. This is often referred to as "gap and crap". Putting in a market short order pre-open gets the same price as the buyers, since all orders have to be filled at the same price. So I'm basically riding the specialist's coattails. Sometimes a stock will "gap and go", but that takes a very strong stock indeed.

[/ QUOTE ]

Yes, market orders do have to all be filled at the same price, but on thinly traded stocks a market order can heavily influence what that opening price is.
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