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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TFF who wrote (6555)	2/20/1999 3:37:00 PM
From: steve goldman	Respond to of 12617

Shorting Listed Stocks. A different world... Below is an email response I had sent a client regarding a short sale execution on a listed stock. The client was wondering how he did not get the opening price at 53 1/2 and ended up getting 51 5/8. I thought the email demonstrated some of the complexities in shorting listed issues. I have removed all names for confidentiality reasons. Listed stocks work entirely different than OTCs. With listed issues, they are all placed with the specialist on the NYSE. From my perspective, there is little you can do to work a listed stock. There is a single individual that makes sure that the trade complies with uptick rules. With OTC stocks, there are multiple market makers, its a negotiated market, so you must work. Since a listed stock goes through a single individual, a specialist, who makes the market in the stock, your short is handled like any other. Unlike OTC shorts, where you can make it your offer each way down, being the first in line, shorts in listed are all taken care of by the specialist. Everyone gets treated the same, and shorting listed is even tougher (in terms of results, not effort becuase there really isnt much to it..you simply give it to the specialists, SS1000FNV MKT). Your short order becomes a dynamically changing limit order, with the worst position on the offer, without having to be displayed. Thus, while it might open at 1/2, that was a down tick (note that on listed it goes by ticks, (even harder) than bids.)...ie on nasdaq you can hit a bid, on nyse you can almost never hit a bit for a short....nyse shorts are even more difficult that OTC. Below is a times and sales for the stock...you will need to go to the bottom and scroll back up. As you can see, the stock closed the daybefore the 16th at 53 3/4..thus the open the next day at 53 1/2 was a downtick...CANNOT SHORT IT THERE. the stock only tanked and 10minutes later was at the low of the day..as bad a price as it appears, from my perspective, it is an entirely proper and good fill. There is no complaint i can lodge with anyone as it is the first uptick of the day. The only other thing you could do would be to tell the trader to hold off and wait for the selling to get done (otc I can work inbetween so I can work admist the selling..on listed, cant..upto the specialist).. if you want to talk about how to improve your performance, give me a call this week. Date Time X Volume Price VWAP Cond Corr# Seq# 02/17 09:39:30 N 1000 51.6250 52.7343750 16748 02/17 09:39:26 N 2000 51.50 52.7500000 16685 02/17 09:39:26 T 200 51.6250 52.7968750 16678 02/17 09:38:13 T 2100 51.5625 52.7968750 15348 02/17 09:38:04 N 2100 51.6250 52.8593750 15161 02/17 09:38:04 T 800 51.7500 52.9062500 15159 02/17 09:37:46 N 200 51.5625 52.9375 14790 02/17 09:37:34 P 100 52.0 52.9375000 14540 02/17 09:37:34 N 2100 51.5625 52.9375000 14537 All downticks still 02/17 09:37:24 N 1000 51.7500 53.0 14334 02/17 09:36:51 N 2000 52.0 53.0312500 13576 02/17 09:36:47 T 100 52.2500 53.0781250 13488 02/17 09:36:45 N 1700 52.0 53.0781250 13411 02/17 09:36:38 N 1000 52.2500 53.1250000 13249 02/17 09:36:28 X 1200 52.5000 53.1562500 12933 02/17 09:36:18 T 100 52.4375 53.1718750 12635 02/17 09:36:17 N 400 52.5000 53.1718750 12608 02/17 09:36:07 N 2000 52.5000 53.1875000 12409 02/17 09:36:00 N 2400 52.5000 53.2187500 12272 02/17 09:35:36 N 1000 52.7500 53.2812500 11771 02/17 09:35:28 N 300 52.7500 53.2968750 11473 02/17 09:35:24 N 600 52.7500 53.2968750 11353 ALL DOWNTICKS 02/17 09:33:43 N 5000 53.0 53.3125000 8544 02/17 09:33:36 N 5600 53.0 53.3750000 8350 02/17 09:33:18 N 1000 53.2500 53.4843750 7816 02/17 09:32:47 T 100 53.5000 53.5000 6706 02/17 09:32:34 X 100 53.5000 53.5000 6022 02/17 09:32:34 X 1000 53.5000 53.5000 6021 02/17 09:32:34 X 200 53.5000 53.5000 6020 02/17 09:32:34 X 200 53.5000 53.5000 6019 02/17 09:32:34 X 200 53.5000 53.5000 6018 02/17 09:32:32 P 800 53.5000 53.5000 5949 02/17 09:32:32 X 300 53.5000 53.5000 5948 02/17 09:32:32 X 300 53.5000 53.5000 5909 02/17 09:32:32 X 300 53.5000 53.5000 5908 02/17 09:32:32 X 300 53.5000 53.5000 5906 02/17 09:32:32 X 300 53.5000 53.5000 5905 02/17 09:32:32 X 400 53.5000 53.5000 5904 02/17 09:32:32 X 700 53.5000 53.5000 5903 02/17 09:32:32 X 1000 53.5000 53.5000 5902 02/17 09:32:31 X 100 53.5000 53.5000 5884 02/17 09:32:31 T 100 53.5000 53.5000 5881 OPENED at 53 1/2...CANNNOT SHORT IT THERE>..DOWNTICK, lower than 53 3/4... 02/17 09:32:28 N 12600 53.5000 53.5000 5781 **NOTE THE CLOSE ON 2/16 at 53 3/4 02/16 17:01:11 N 11000 53.7500 SOLD 524938 02/16 16:04:21 M 900 53.7500 52.968750 514553