NYSE

  • 19 Dec 2012 at 12:46 PM

Running Exchanges Is Too Hard, Exchange Chiefs Say

U.S. exchanges have become a handful to handle. It seems that all of the order types they’ve instituted over the years to keep customers and regulators happy may have had the opposite result.

But it’s not Elizabeth Warren or Bernie Sanders or some other Capitol Hill communist levying these charges. It’s the exchanges themselves. And rather than doing something about the things they’ve done to make themselves “overly complex and opaque” at the expense of ordinary investors, they’d prefer to have Congress make them do something. Read more »

Unclear if this sit-down will take place at Louis’ Restaurant in the Bronx, or if Duncan Niederauer went on to say, “Let’s see how tough he is without his Twitter handle.” Read more »

  • 14 Sep 2012 at 3:01 PM

NYSE Fined For Selling Product That Was Too Good

The standard illustration of the efficient markets hypothesis is the thing about the economists and the $20 bill on the ground, but it is so old and stale at this point that Matt Yglesias had to invent a new version this week, and it’s something like “if you find a penis-enlarging injection on the ground, don’t pick it up, because if a penis-enlarging injection actually existed then Pfizer would already have picked it up, and so this one will kill you of exploding penis, QED.” You could take this advice overly literally as an argument against all human effort, and perhaps you should, but in fact someone didn’t take it literally enough, or at all, and so died of exploding penis.

“If it works someone’s getting paid for it” of course doesn’t imply the converse “if someone’s getting paid for it it works” – particularly not in the penile-enlargement field – and I suppose neither does EMH; if anything it just implies “nothing works and nobody gets paid.” Still, there is at least some weak intuitive support for the belief that if lots of sophisticated financial market participants pay for something, they’re getting some value back in return.

Why is the SEC mad at the New York Stock Exchange? I am puzzled; the SEC’s quotes on the matter seem to be refutable on first principles. Here is Robert Khuzami in the SEC’s press release:

“Improper early access to market data, even measured in milliseconds, can in today’s markets be a real and substantial advantage that disproportionately disadvantages retail and long-term investors,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “That is why SEC rules mandate that exchanges give the public fair access to basic market data. Compliance with these rules is especially important given exchanges’ for-profit business interests”

And here is Sanjay Wadhwa to Bloomberg: Read more »

  • 01 Aug 2012 at 2:04 PM

Knight Unhorsed

Yesterday I and others pointed out that, while UBS was not alone in getting screwed by Nasdaq failures on Facebook, it was alone in losing 10x as much as other, more competent market makers like Knight Capital, and ha ha ha. This apparently had a jinxing effect:

Knight Capital Group Inc., one of the largest trading firms, told brokerages to send their orders elsewhere and was probing a software problem, according to people involved in the matter. U.S. exchanges said they were examining potentially erroneous trading in more than 100 securities that saw big price swings or unusually high volume. Knight saw a fifth of its own market value wiped out. …

The system error and reports of irregular trading stoked suspicions that trades had been accidentally duplicated via computer algorithms, rather than the problem being contained to one server, as has happened in the past, traders said.

Knight is down ~21%, vs. ~4% yesterday for UBS and its costly Facebook fail, a useful reminder that focusing on perfecting your market-making business may make you less likely to fuck it up, but when you do fuck it up it goes far worse for you. That’s maybe some sort of a metaphor for high-frequency electronic market-making generally, which it will not surprise you to learn is coming in for some flak today.* Algorithmic high frequency trading makes it more likely that your small trade will be executed quickly and cheaply, but it also makes it more likely that larger orders will go horribly awry as prices move away from them.

Which is why this coincidence (?) pointed out by the Journal is kind of tantalizing: Read more »

Is that how it is? Read more »


[via CGasparino]

As you may have heard, the East Coast got some rain this weekend, which affected a bunch of people’s abilities to get to work. Goldman Sachs employees who reside in the city and work at 200 West were given vouchers for car service for this morning’s commute, though, according to Heidi Moore, everything was booked by last night, and some people were left slumming it on the subway with Mayor Bloomberg or hoofing it downtown. Citi employees were given remote access to the network in order to work from home, while those determined to make it in got their pick from of a box of rollerblades, wrist guards, and elbow pads left in the lobby of 388 Greenwich on Friday afternoon, among other “transportation alternatives” they were offered. Many of those who live in Connecticut (and Westchester) and work in New York or vice versa most likely stayed put this morning, on account of Irene seriously fucking up the Nutmeg State, battering roads and putting the BarCar out of commission. Some of those who did get in shared a closer look at how the weather affected their routines, like Susanne Petronella, who didn’t have time to put on her face.

Petronella, a floor clerk for GI Brokerage at the NYSE, lives in the borough of Queens. She drove into the city with four other people over the Brooklyn Bridge. “I’m usually still in bed right now,” she said in front of the NYSE before 7 a.m., while smoking a cigarette. “My hair’s not done. My makeup’s not done.”

One guy thought the lack of humans downtown was great, and welcomed whatever further natural disasters it would take to make this the norm.

Phil Prothro lives in Jersey City, New Jersey and left his home at the usual time, arriving in Manhattan by PATH train. “It was actually a pleasant commute,” said Prothro, who works at GDS International. “No problems at all. It was on time and empty, and I was expecting it to be late and full.” He said Wall Street was more empty than it normally is. “This is very unusual,” he said, while waiting for an egg and cheese sandwich from a cart at about 7:40 AM. “It’s how I wish it was every day.”

Then there was Duncan Niederauer, whose morning was an absolute nightmare. Read more »