Q&A
Since You Asked
| Professional trader Don Bright of Bright Trading, an equity trading corporation, answers a few of your questions. | 
Don Bright of Bright Trading |
MARKET MAKERS AND SYMBOLS
First, I want to thank you for your efforts in educating new traders. I've reviewed some of the information available at the NYSE and NASDAQ websites. There's a ton of material to learn from, but I still haven't figured out where to find the symbols representing exchange members or how to trace their end-of-day trading activities.
Second, I have to confess that I speak as a naive equity trader from home with a three- to five-day perspective. I am trying to figure out the rules and participants on the playing field(s). Who are these players, what are they doing, what does it mean? What are some of the intermarket relationships (for example, WRT futures)?
You sometimes refer to "market maker." I am sure that many readers would appreciate having a better understanding of who the different market makers or participants are, and how individual investors or traders should interpret their actions. Also, I would appreciate knowing where I could find timely information (preferably on the web) on what the major market makers such as exchange members are buying and selling. -Kurbanis Said
You can find the symbols at https://www.nasdaqtrader.com/trader/symboldirectory/symbol.stm.
Your reference to "end-of-day trading activities" is confusing to me. I guess you are hoping to get a daily recap of who did what. This information is not available from the exchanges, and even if it were, it would not be helpful. The reason is that many trading firms are also retail brokerages who trade with and against their customers (depending on market conditions), and professional firms like ours do not disseminate that information for obvious reasons.
You can find out what the "giveups" are from the New York Stock Exchange (NYSE). For example, SLK = Spear, Leeds, and Kellogg (our clearing firm), but they also clear for many members. Again, this information alone is not of much value.
You probably will not be able to find the net market maker positions since public filled orders are generally reported on the tape, but this may not reflect firm orders that were filled.
To really find out how all this works may take some real training not available via the usual sources. The training that we offer at Bright Trading is aimed more toward those who really want to trade for a living and become licensed professionals. We do spend a full segment on "Players of the Game," but even after knowing who they are, it takes a good six months before you will be able to comfortably identify them by reading the tape.
It appears you are asking good questions but expecting different answers. There is not, and will not, be a way to track successful traders in the hope of duplicating their methodologies. Two different (successful) traders will respond differently to the same set of circumstances (if that were not so, then there would not be a true "marketplace.") Through education and experience you will be able to put techniques into use that will enhance your abilities, but if it were possible to duplicate successful responses to market conditions, then we would simply have a bank of traders doing the same things. This, of course, would not work, since when you are actually trading - not paper trading - what you do affects the market and changes it.
The good people at STOCKS & COMMODITIES have given me the go-ahead to write a market maker story, and you will see it soon. In addition, we are planning to do a "2002 World Tour," which will go to several cities to provide a low-cost, educational introduction to serious, reality-based trading. Thanks for the questions, and keep reading!
TRADING ON SEVERAL EXCHANGES
Can the same company trade on many stock exchanges? This question may have been asked before, but I can't find a suitable answer. What I want to know is: Can a company like Ford trade on two different stock exchanges? If so, does the price on one exchange affect the price on the other in a direct correlation? Is it possible (not does it happen) that a company can have one million shares worth $10 on the NYSE and have another million worth $10 on the London exchange? If this were the case, could you pick and choose which stock exchange to buy your shares from? I am interested in the dynamics of a large company, but I have no knowledge of the fiscal world. Can you explain? - John McGinty
The company itself is usually listed on the primary exchange (NYSE in your example). The shares can be traded by any regional exchange as well. For example, as of this writing I see the following quotes (bid prices) for Ford Motor Co.: NYSE, 65.75; Boston SE, 65.68; Chicago SE, 65.68; NASD, 65.58; and so forth. The shares can also be traded on one of several electronic communication networks (ECNs - Island, Inca, Arca, and so on) at the same or different prices. It is possible to take advantage of pricing disparities between exchanges but don't count on it, since they are all linked electronically. There are wheels in motion to direct customer orders to the "best price" - but not quite yet, I think.
Your question about the "worth" of the company as it relates to stock price does not relate to which exchange the shares are being traded on. You must simply find out the number of shares issued that are outstanding and multiply that times the current price to determine market valuation. Think of it like this: You hold 500 shares of stock in Ford Motor. You could offer 100 shares for sale at five different locations. If you directed their sale to be a market order, you might receive five different prices. The primary market (listing exchange) is the price you should rely on. Hope this helps.
Don Bright is with Bright Trading (www.stocktrading.com), a professional equity corporation with offices around the US. E-mail your questions for Bright to Editor@Traders.com, with the subject line direct to "Don Bright Question."
Originally published in the January 2002 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2001, Technical Analysis, Inc.
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