Ray-
Do you know if the nyse supports market orders still?

by jeff on November 8, 2007 10:19 AM

No offense take, Ray. However, if this Hybrid market doesn't improve soon I will begin to take it personally.

Anyway, as for the titmice, why don't you get a pole with a squirrel-guard to feed them? The deer definitely don't need the food and they'll only bring ticks closer to your house.

-DT

by Dinosaur Trader on November 8, 2007 12:03 PM

Jeff -- Yes, we accept market orders. Thanks for the question.

DT -- On the Hybrid, we're working on improving it all the time, in particular encouraging specialists to match orders and improve prices. I wonder how much of your negative experiences is due to decimal pricing, auto-routing and other things that are not specific to Hybrid, but it's hard to break these factors apart. I'll let you know if I can get some insight into that.

On the feeder, I appreciate very much the suggestion. I already have a squirrel-proof feeder, but the pole is not so high as to prevent the deer from standing on their hind legs and having their fill. Any higher and I'll need a ladder every time I fill it. Used to have it hanging from a tree with a rope I raised and lowered, which worked great until the tree fell down. Will keep working on it.

by Ray Pellecchia on November 8, 2007 1:48 PM

Ray, exactly how is the nyse "encouraging specialists to match orders and improve prices"? It doesn't seem to be working.

by Ron on November 8, 2007 3:00 PM

Ray,
Could you please help us understand that advantages of Hybrid over ArcaEx?

What does Hybrid offer that ArcaEx doesn't?

Seems like a typewriter ribbon company's approach to maintaining the relevancy of their clearly obsolete product.

Are there specific metrics or a specific time frame management is using to help guide its decision for integrating trading platforms/scrapping Hybrid and chalking it up to sunk and opportunity costs?

Thanks in advance.

by Barry on November 8, 2007 4:02 PM

Ron -- Most recently, we've changed specialist compensation to base it on the amount of price and size improvement, quoting at the best price and matching better away prices; expanded a pilot making it easier to make stabilizing trades; allowed stocks to be opened on a quote electronically, so specialists can focus on stocks that need their judgment or participation; reduced the minimum amount of displayed reserve interest to 100 shares from 1,000 for specialists and brokers; and revised the rules for specialist trading in the aftermarket.

We're doing all that we can, and we're continuing to focus and work on it.

by Ray Pellecchia on November 8, 2007 4:30 PM

ray-
you are a diamond in a sea of sharks and scum in this business

by jeff on November 8, 2007 9:30 PM

Hello Ray,

I'm new to this NYSE Euronext blog - but a long term stock holder of the international conglomerate. My question is when will we roughly reach the goal of 18-hr global trading window and the 24-hr window as well? I recall many months ago that the potential of more trading hours and its huge benefits could be reached. Does the company have a time-frame to reach that goal?

Long NYX and optimistic about the next 2-3 years.
Regards,
Ed

by Ed LeBard on November 8, 2007 9:33 PM

the subprime crises did not happen overnight.there is more to come due to the generally wastefulness and limted resources of americans.nothing is enough through waste.good luck america.

by phuah swee tatt on November 9, 2007 12:22 PM

Hey ray,

This might be a stupid question, but ill ask anyway. Of those who created hybrid and speak its praises...How many of those said decision makers have actually traded a single stock in their lifetime? You know...a sales trader, specialist, broker, day-trader. Reason for asking: I have yet to come across a fellow TRADER who feels hybrid is workin out...
Thanks again,

JT

by jt on November 9, 2007 3:08 PM

JT- Add me to that list. Everyone i talked to (Iam a partner in a daytrading firm) is negative on the Hybrid. Even the institutions who i guess this was created for mostly use other venues. I really wish they would just change a few things and get on with it already. Thanks.

by tony dey on November 9, 2007 4:59 PM

Hi ray,
As a novice trader (5 months old...) i enjoy your blog a lot, and many thanks for that. But one thing bothers me: I keep reading bad things about the Hybrid. Why? How was life before the Hybrid?

by Reuven Palatnik on November 11, 2007 5:04 PM

Jeff -- Thanks for saying that; made my day!

Ed -- I don't have any news on expanding the trading day in any of our markets, but I do note that the NYSE Euronext trading day for equities begins in Europe at 9 a.m. CET (3 a.m. in New York) and continues through 8 p.m. (NY) via our NYSE Arca market. So we're already at 17 hours. Will let you know if I hear of anything further on this front. Thanks for writing!
PS -- If you add in the Liffe contracts that begin trading at 5 a.m. local time, our trading day stretches to 20 hours!

JT -- Traders from the floor to upstairs were involved in every step of creating the Hybrid Market. Bear in mind, it's not being fully used as it was designed; we need more participation from the trading floor, and we're continuing to work on that, as I've said. Appreciate your writing.

Reuven -- I appreciate the kind word. I think most of the negative things you read about Hybrid have to do with people missing price improvement, matching and stabilization from specialists, which were higher pre-Hybrid and pre-Reg. NMS. We're trying to increase the levels of those activities. Thanks for writing, and reading the blog!

by Ray Pellecchia on November 12, 2007 9:47 AM

I have to laugh at how a year later, I'm still reading the same BS about price improvement and specialist matching. The lack of liquidity in the hybrid market, with hidden orders and dark pools and all the other nonsense has created a market that is absolute garbage to trade. How are hidden orders and dark pools condusive to a fair, orderly, and transparent market? Mabey its great for the boys at Goldman, but its a load of garbage for everybody else.

by jack bauer on November 12, 2007 8:25 PM

Jack -- Reserve orders have always been around in one form or another. Even before Hybrid, floor brokers would reveal only a portion of a large order at a time, so as not to tip the market and disadvantage their customer; reserve orders just make that ability electronic, so brokers can compete in a Reg. NMS, more automated environment.

Re dark pools, are you complaining about the ones that other markets and firms operate, or the ones that NYSE Euronext hasn't even launched yet?

Thanks for writing, Jack. Can't wait 'til you're back on "24."

by Ray Pellecchia on November 13, 2007 6:00 AM

Hi Ray,
I really don't mean to beleaguer, but I'm hopeful that you might be able to help clarify a couple of things from the 10/12/07 CNBC interview with John Thain (which you can see at the link below).

1) At ~3:00 minutes into the video: Mr. Thain explains that market share erosion is due to in large part to speed. He explains that NYSE is not yet fast enough. Then he says that if you really want to trade fast, to trade on Arca.

If it's about speed, and Arca is fast, what are the advantages Hybrid?

2) At ~4:40 into the video, Mark Haines asks Mr. Thain about talking to Citi about a job...With full respect to the company's stance on commenting on rumors, it's curious that he not only comments on the rumor/speculation, but he denies it.

Is this an official NYX statement on the rumor? Would it be possible to clarify the record given the persistent rumors (for example, tomorrow's "Fast Money" (CNBC) is going to do a bit on Mr. Thain's compatibility with Citi)?

Here's the CNBC link to the interview with John Thain:

http://www.cnbc.com/id/15840232?video=556855629&play=1

by Barry on November 13, 2007 8:39 AM

Barry --
1) I think the answer is in John's comments earlier in the interview. When the market is volatile, more people trade on NYSE. Why is that? I'd prefer to let customers speak for themselves, but my take is that it's because they like our price discovery; our ability to fill orders; our pricing; and the ability to tap human interaction when it can add value, such as with executing complex or difficult trades or strategies.

2) As I've said here previously, I don't have anything to add on the topic.

by Ray Pellecchia on November 13, 2007 1:00 PM

Do you have any idea why on nasdaq stocks i am now seeing nys prints.
Thanks

by josh on November 13, 2007 2:29 PM

Josh -- Might they be NYSE Arca prints? NYSE doesn't trade Nasdaq stocks, but NYSE Arca does. Could also be our trade-reporting facility, but I don't know how that prints; could check if you'd like.

by Ray Pellecchia on November 13, 2007 2:48 PM

Ray, Why doesnt the NYSE just use either "Matchpoint" or change Hybrid into a venue where the specialists control the flow and do what they always have done, Price improvement & matching with size on the bid/offer?

Anyone who prefers ultra-fast execution can use "Arca" like they do now and your customers who prefer to be price improved can use the other venue. This way you would get the floor involved as well enable your customers to execute block trades again at 1 price.

This is basically the best way to capture all the "dark pool" volume and regain overall trading volume & market share that has been lost since the hybrid came out. Its too complicated now and this would really simplify the whole process and make for a much better business and exchange in general. It really seems like the NYSE is doing everything but what is honestly needed and wanted by your customers. Thanks again.

by tony dey on November 13, 2007 9:54 PM

Tony -- Thanks for your suggestions, which I welcome as always. A few thoughts in response:

Matchpoint is still pending SEC approval, and it will have a very different purpose and function: a point-in-time match at the closing price of the primary market (for the after-hours match) and the midpoint of the NBBO for the intra-day match.

Re: having specialists "control the flow," please bear in mind, Reg. NMS is about opening order flow to all markets via auto-routing.

This also means that NYSE must have its quotes be automatically accessible the vast majority of the time, or even best prices can be traded through by other markets. We can't just send the high-speed customers to NYSE Arca; NYSE itself must be open to them as well, or there would be no critical mass of liquidity on NYSE.

I agree with you in wanting specialists to improve prices more and match better away bids and offers more. We're doing all we can to make that happen; specialists have to as well.

I'll continue to keep you posted on any developments on this front. Again, thanks for writing, Tony.

by Ray Pellecchia on November 14, 2007 9:08 AM

Tony -- Thanks for your suggestions, which I welcome as always. A few thoughts in response:

MatchPoint is still pending SEC approval, and it will have a very different purpose and function: a point-in-time match at the closing price of the primary market (for the after-hours match) and the midpoint of the NBBO for the intra-day match.

Re: having specialists "control the flow," please bear in mind, Reg. NMS is about opening order flow to all markets via auto-routing.

This also means that NYSE must have its quotes be automatically accessible the vast majority of the time, or our best prices could be traded through by other markets. We can't just send the high-speed customers to NYSE Arca; NYSE itself must be open to them as well, or there would be no critical mass of liquidity on NYSE.

I agree with you in wanting specialists to improve prices and match more. We're doing all we can to make that happen; specialists have to as well.

I'll continue to keep you posted on any developments on this front. Again, thanks for writing, Tony.

by Ray Pellecchia on November 14, 2007 9:09 AM

As a trader, I kind of hate having 10 different ECNs plus ARCA and the NYSE to "choose" from. I just want to enter my order, not have to worry about where I route it (or worry about fees if I route it wrong) and get the best friggin price.

Finally, I want some accountability with the quote system... not this super fast flashing of bot quotes that are impossible to "read" and don't add any quality to the system since they're rarely traded.

That is all.

-DT

by Dinosaur Trader on November 14, 2007 2:15 PM

Thanks Ray, The bottom line is that i just want things to get better for all your customers who use Hybrid to make a living. Honestly, ask anyone who really trades on it everyday and its really lacking in liquidity, price improvement & matching are almost non existent at this point and has stability issues. I appreciate you trying to keep us updated on changes but it really doesn't seem to be getting any better. I am hopeful that with the new change of leadership at the NYSE we will start to see some of the stuff that you have posted. Ray, i am a loyal customer and i don't like to bash the Hybrid but we really need some changes to the system. Thanks again Ray.

by tony dey on November 14, 2007 8:06 PM