Courtesy of The Dopey Cowboy
DARK POOLS are the one thing that keeps me up scratching my head at night. Regulators in all their genius, decided that your every day Joe Schmo investor was being treated unfairly and needed more market transparency. So what did we do? We created “dark pools” of super secret hidden liquidity. So much for transparency and disclosure.
VWAPS also helped to destroy the industry. Market data that started out as a way to analyze daily stock activity has become a way of life. How pathetic. Being average has now become the bogie. There went all the creativity and differentiation amongst market makers, sell-side and buy-side traders. It’s no longer about getting the best price for your customers or not impacting the tape. It’s about being within a penny or two from the VWAP.
ALGOS- Screw them too. If I had my way, they’d be plucked off everybody’s desk like chickens. Stretch this! We are traders – not monkeys. We are supposed to prove how good we can trade based on information, levels, conviction and “feel”. It's not trading when you throw your order in some algo and watch the micro-reports come back.
Smart Routing- Instead of me hitting or taking a stock with a penny spread, lets miss the stock completely and watch it gap twenty cents while my smart router searches the dark pools in the middle. The hell with Dark Pools!
“In Touch With” -Everyone jump! I have a client I'm “in touch with.” Either you have it or you don’t. If you have it, let’s get something on the tape. If you don’t have it, then stay out of my way and shut the hell up. Come over here… I’ll show you something I’m in touch with.
“Treat Me Subject” – Now that you’ve spent forty minutes masterminding this lay-up situation, the entire trade is out the window. Someone has to go first… or… I could just lie to the other client like I’m usually forced to do in order to keep him here. I’ll just tell him the bids are natural and then when you back away I’ll eat it… again. Treat me subject is a synonym for I have no guts… or conviction.
Instant Messenger- AOL single handedly changed the industry. Dweeb sales traders who were afraid to call accounts, fearing their stupidity would show, now had a passage way to contact accounts as much as they wanted. Traders who didn’t even understand what “bid for” or“sell at” meant were now copying and pasting their way into the trading rooms of every account in America . Instant Messenger helps to cloak their stupidity, cause now they have time to ask people around them for help. Remember the old days when senior people than would scream at the new or incompetent traders for screwing up the terminology. All gone.
Vague Instructions (insert hook in mouth)- “I would in line, except if you think if its going to come in.” “Be a 1/3rd, without moving the stock… might grow” - which means go find me the other side even though there’s no supply since I just got done sucking up all the liquidity from the dark pools….and one of my all time favorite quotes:“that cleans up my buyer”… Demand is infinite fool. You can only clean up a seller.
Manning-Reg NMS. I would love to find and kill the trader who screwed this Manning guy and didn’t give him his 200 share fill. Remember the days when your customer was a buyer, and you would hit the stock down using your quote and try to scoop cheap stock in instinet. All gone. Remember going to the bid and buying stock without an order just to see who was hitting it. Gone. Remember trying to do better for your net buyer by letting the stock come in, all done cause after you sweep the display size, you make .02 cents and wind up being long 50k shares on trade that was “riskless”. Making money-all gone.
PEOPLE. “Hey bro, here’s a big one for you and you don’t have to thank me. Buy 25k MSFT. That’s Mi-cro-soft, got that? Piece it over the day, try and beat the vwap, feel free to stick it in an algo and don’t forget to put some in the cross or Liquidnet at noon. This might work to some good size, so if you have any select calls to make go ahead. But only a couple and be smart about it cause I don’t need this thing running up in my face. But if you do find a seller, just treat me subject… It’s trades like water, you mind putting a penny on that..? And uh… I’m gonna need to step some of that out. I owe some research bills.”
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