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Tom,
Thanks for your post. I ALWAYS enjoy reading them and your perspectives.
Let me tell you a little story about bad price ticks that actually happened
to me.
So I was long some CC, a few months ago. The market had been real choppy,
and I was antsy to get out. I was watching the market closely in the
morning as I tend to do when I want to exit a position. At the time, I had
delayed New York quotes so I was relying heavily on a phone quote line and
verbal quotes from my broker (for some reason, I had too much faith in
these). It was about 30 minutes into the trading session and CC had sold
off slightly on the open, found support and was creeping up to the ID high.
The market had set up the night before so that an explosive move the upside
wasn't an unreasonable scenario. I called the phone quote line and got a
quote of 1630. I called again 10 minutes later and got a quote of 1659.
At first I thought this must be a bad tick. So I called my broker to get
a so-called definitive quote. I asked him what was in Dec CC and he said
1659 (this was about 2 minutes later). To hear the same price from my
broker was good enough for me. Like any good trader who knows not to
ignore a windfall profit, I immidatly placed an order to sell all my CC,
market. He took my order and thanked me. Still not totally convinced that
1659 was a real price, I called the phone quote line again a few minutes
later. The price was now 1628. I had been duped. I had sold my CC at a
fictitious price. I called the CSCE and while very nice, the offered no
retribution. They suggested I talk to my broker. My broker was also very
polite and at least offered a free trade equal to the cost of that one.
So the upshot was that I learned a lesson about New York markets and bad
data: If it seems to good to be true, and it comes out of New York, it
probably is.
My hats off to the CBOT and CME that do, in my opinion, a darn good job of
reporting prices in all the major markets. Sure a few slip by every now
and again but it's rare day when it happens. I mean when was the last time
you saw a bad tick in the S+P? The quality of data from New York doesn't
even compare to the quality of data from Chicago.
I'm thankful at least there's seems to be sanity in Chicago.
Thanks,
Brian.
-----Original Message-----
From: Tom Cathey [SMTP:K1JJ@xxxxxxx]
Sent: Wednesday, March 25, 1998 1:19 PM
To: omega-list@xxxxxxxxxx
Subject: Those Nasty New York Commodity Markets
This was sent out Tuesday - Maybe it got lost -----Sorry if it gets posted
twice - TC
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Hi Everyone -
Today, as usual, I found a large number of bad ticks in the regulars....the
oils, coffee, etc.
I just cannot understand it! After all these years you'd think they would
put in a little software routine to catch a ridiculously "off the wall" bad
tick as it comes out of the pit.
I envision a minimum wage person sitting in the pit punching in numbers as
he hears them. Everyone makes mistakes, including the CBOT, CME etc. But
notice the other exchanges RARELY have bad ticks....sometimes for weeks on
end.
Anyway....here's my assessment of the NY commodity markets:
When a trading friend asks me an "information" type question about New York
commodity markets, and I don't know the answer, I usually say..."just
figure out how they can best screw you and that's the answer".
Example:
Question: How good are the fills coming out of NY? Ans: Many times they
will fill you at the top of a move after it happens. Question these bad
fills and you will usually get them to adjust the price without
arguement...(they got caught)
Question: How good are the quotes coming from the pit ? Ans: There are
days when you simply give up deleting their bad ticks....sometimes I look
at the next contract coming up (after the server was collecting data for a
coupla months) and am floored by all the bad spike ticks of the past)
"Don't worry, they won't make money no matter what data when send out"
Question: Are they open or closed during "off" holidays? Answer: Of
course they're closed! Look down the quote window list on an "off" holiday
and you'll see all the NY markets off somewhere at the beach...the heck
with the rest of the world!
Question: Gee, what kind of delay on "delayed" quotes can I expect? Of
course, another screw job - All the other exchanges give you 10-15
minutes....NY delays their quotes by a full 30 minutes!
"Let's make SURE they pay for real time"
Question: What are the exchange fees for quotes? They are by far the
worst in the industry. While the CME and CBOT have the most active and
liquid markets in the country, the NY Markets have found a way to charge
almost twice as much to do business with the "den of thieves" (as many
traders call them) in NY.
I find it no coincidence that the NY Stock Markets are obviously located in
NY also. Their "market maker" good old boys network is legendary.
Maybe it's just the obvious cultural difference comparing the Mid-West
commodity markets to the NY ones....but I for one have put up with their
crap for many years now and cannot believe it continues in this day and
age.
Have others experienced these feelings? What do they say when asked about
their constant bad ticks?
Tom Cathey
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