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Strategies & Market Trends : The Final Frontier - Online Remote Trading

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To: LPS5 who wrote (8561)	12/30/2000 12:23:04 PM
From: davealex	Read Replies (2) of 12617

Anyone know a link where I can see what an NYSE specialist's book looks like? Screen shots? Procedures? I am fascinated that with so many orders coming in, a lot of the press and trading book authors use language and terminology that brings to mind one person sitting in front of one screen. As orders come in, the specialist taps some keys for every incoming order individually. In a listed stock with a huge amount of volume each day and a lot of small orders, there must be some sort of auto execute feature that specialists use to fill a slew of incoming small orders out of inventory. How could they manage otherwise? When you look at a post, there are usually a bunch of clerks sitting around punching buttons. Are these people (and not the actual specialist) filling these on verbal direction of the specialist? I'm just imagining how it would work: the specialist asks "How many in the buy queue?" Clerk says: "40k" and the specialist says "Give all of them a teeny better." Or maybe the specialist just calls out the price and the clerks type in the autoex number in a box and the queued orders fill. Maybe I am missing something here, but I don't see how one person can manage massive volume made up of a lot of small orders, while at the same time devoting adequate attention to the negotiation of large orders. Either a clerk or their software must be handling the bulk of the transactions while they work the big ones. I use SuperDOT now, but it seems as if this new Direct+ could create some pretty interesting opportunities. As an aside, I think this whole Nasdaq SuperMontage, SuperSOES and decimalization issue will create some pretty interesting opportunities for those who dig into the exact mechanics of the system and exploit its weaknesses. One thing I noticed in the Nasdaq's FAQ sheet about SuperSOES is a lot of waffling and hedging on answers (ie. "we don't think that will happen, but if we notice a pattern of abuse, we will investigate.") The original SOES bandits basically just exploited a weakness in a system and it worked for some time. I expect there will be several exploitable areas (until they close the loopholes) when the new system is put in place... Dave

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