Words are flowing out like endless rain into a paper cup (a.k.a., more Q&A)

By: Ray Pellecchia

File Under: NYSE

• 4 Comments
• Email Entry

One bunch of comments begets another, and I welcome that. It feels like limitless undying love, which shines around me like a million suns. It calls me on and on, across the universe.

Plus, it keeps me employed.

The following came in response to yesterday's post, Restless wind inside a letter box. After this one, I'll knock off the "Across the Universe" references, I promise.

For the rest of today, at least.

hey ray,

I actually think the hybrid market is working incredibly well. I was a big skeptic at first, but now have grown accustomed to slightly more volatility. As new order types and a better understanding from the trading public, the NYSE will continue to evolve for the better. I do have one quick suggestion that harkens back to 1 of my original posts some 8-9 months ago. Is there any way to free up the LRP so it is not so restrictive. When trading opens for just about any stock with considerable news...the LRPs seem to constantly get hit for the 1st 30 min -1hr of trading....If we just extend them maybe 50 or so more cents on both sides, i think trading would be much more fluid as soon as the name opens.
-- jt

JT -- Glad you like the Hybrid Market. And thanks for the suggestion on widening the Liquidity Replenishment Point ranges. I haven't heard any other calls for doing that (maybe I have the music turned up too loud) but we take all input into consideration.

I just posted this comment on the previous post, but I thought it would be appropriate to comment again since this post did such a great job of praising the specialists.

I read an article a month or so back that said the specialists would walk if their situation did not improve by Labor Day. Ray, what ever happened to the much talked about specialists incentives?
-- Ron

Even before I responded, in comes this:

Ron - About a month ago the NYSE revenue sharing program for specialists was extended to August - with $26.5mln in subsidies on the table. As of June of this year, NYSE already paid out over $55mln since the subsidies began around January 2007. Thanks.
-- Vlad Khandros

Vlad -- Thanks for noting that. I haven't been tracking the dollars, but you're certainly correct that the revenue-sharing program has been extended through Aug. 31, 2007.

Ron (and Tony Dey, who posted a similar question previously) -- We're continuing to work on changing the specialist compensation model, modifying the rule on price stabilization (currently extended through Sept. 30, 2007), and making other changes to address volatility and strengthen the market.

Some of these changes -- such as compensation and stabilization -- take a lot of time to get right. We're looking to improve the market by encouraging specialists to add value and participate when appropriate; at the same time, we have to ensure that any changes are fair to other market participants. That's not an easy balancing act. Plus, our proposals are subject to the SEC's review.

You've seen Duncan Niederauer quoted in this space on what we hope to do, and the fact that it's Priority One here. I know you want these improvements to happen yesterday; so do we, and we're doing everything we can and then some to get them going.

I'm confident that we're going to get it done, and done right. I've seen my colleagues work through complex problems before, and that gives me faith. In the meantime, I'll continue to keep you posted on any progress I can share publicly. You can count on that, and I hope we can count on your public support -- or at least your review and comments -- when we make these proposals. I don't ask for that lightly, but as you've told me on numerous occasions, this is really, truly important.

Again, I thank everyone for writing, and for hanging in with the blog. Good talking with you.

And what would a conversation with me be without a little trivia to lighten the moment? Here's a moment in the evolution of globalization:

Today in NYSE History
24 July 1972 -- The first NYSE publication in Japanese debuted: a pamphlet titled, "Understanding the New York Stock Exchange." (NYSE.com)

Tags: New York Stock Exchange, Hybrid Market, NYSE, NYSE Euronext, NYX, trading, stock market, trading floor, specialists