Yeh, sometimes some things like this happens.. It's system and human risks of this business. And it's a very good news that NYSE can prevent bad consequences from one's error..

by Leonid on June 29, 2007 4:10 AM

Yesterday I noticed during the 2:15 Fed volatility that many of my fills were outside the published quotes.

After the February blowup and even little things like yesterday I can't say I'm 100% confident that the hybrid would be able to really manage some type of crazy trading event.

It doesn't feel airtight yet.

But it's good to see that specialists were able to step in and correct those errors you reported.

-DT

by Dinosaur Trader on June 29, 2007 8:30 AM

Funny, I only saw people loss lots of money from these trades. If the specialist was really doing his job his premarket indication should never have changed. All trades should have been cancelled in all three of these stocks, instead some random number was generated and trades were broken. Not a good system and should really be giving the NYSE a serious black eye in embarrassment.

by Mike on July 1, 2007 1:19 PM

In other words the value of the NYSE is to allow a stupid customer to prevent anyone else from trading for 90+ minutes.

BTW, how do specialists know which prices are "correct" and which ones are "incorrect"?

by Sol Rosenberg on July 1, 2007 5:23 PM

That's nice and all, but they could be replaced by a computer program that performs the same function with more speed and reliability.

by MmmHmm on July 2, 2007 10:16 AM

Leonid -- Indeed, no matter what filters are placed in order systems to catch erroneous prices or volumes, mistakes occasionally leak through, and it's good to have people in the process as an additional safety net.

Dino Trader -- Sorry to hear you're continuing to get filled outside the quote. Since the problem might be related to your orders getting shipped out, and you've told me in the past you like to use market orders, have you tried a Reg. NMS IOC (Immediate or Cancel) market order? That order cancels if it needs to ship. Didn't know if you were aware of it, and I thought it might be of help.

Mike -- When an indication is published, that information can cause traders to send new orders, or cancel existing orders. That activity can significantly change the range of the indication, and if I were a trader, I'd want to know that, via a revised indication. I don't think the specialist should be faulted for publishing the latest on what they're looking at.

If you have a beef with how trades were broken, you should take it up with the market(s) that broke them. NYSE did not break any trades, and we don't control the other markets that continued to trade and later needed to break some of those trades. These are just two different market models -- two different approaches. NYSE Euronext, in fact, offers both: NYSE and NYSE Arca. If the primary market (NYSE) is halted, traders have to make a decision: wait for the primary market to sort it out, or take a chance and trade away, at the risk of getting a bad price or having a trade broken.

To me, to blame NYSE for what happened is like blaming the police for restricting traffic at the scene of an accident. We think it's best for everybody to wait until the broken glass is cleaned up. But if you can't wait and want to go around on the shoulder, go ahead, but don't blame the cops if you shred a tire.

Sol -- Again, our model is to figure it out and then go. If you want to trade first and ask questions later, there are plenty of markets that will accommodate you. I'm not trying to be flip. It's just that I believe the choice is yours.

I don't think there's a formula for determining which orders are right or wrong. Specialists know their stocks. If a stock that trades hundred of thousands of shares a day suddenly gets orders for millions of shares, on no news, you know you have to take a look at that. Same thing for when orders come in at prices way out of range, without any news.

MmmHmm -- I think this episode demonstrates just the opposite. Programs are great for speed and efficiency. But when someone fat-fingers a key and inadvertently bids $100 for a $10 stock, a human specialist will stop that problem from taking place, with about 100-percent reliability.

by Ray Pellecchia on July 24, 2007 6:21 AM