• Sep
  • 07
  • 2006
  • 8:42 AM

Stopping stop-limit orders

By: Ray Pellecchia
File Under: NYSE, NYSE

A reader on the sell side asks:

Hi Ray,

I have heard before that when all stocks become part of Phase III NYSE will not support stop limit orders. Is this true?

That's correct. As part of our Phase III rollout, we will discontinue stop-limit orders. Our research indicates that most people can do this type of limit minding themselves and simply send in a limit order when they see that a stock has reached the limit that would trigger that order. We believe that by allowing customers to do this themselves, they will have greater control and choice than if we continue to offer a service that was rooted in the pre-personal computer era. In addition, we receive only a handful of these orders a day compared to our overall order volume, and from a cost/benefit point of view, it really doesn't make sense to continue to support a service that the vast majority of our customers aren't seeking.

On a separate but related note, concerning stop orders:

• The specialist will have no knowledge of stop orders.
• Stop orders will be held in a blind file until elected.
• Once elected they will be sent to the Display Book and the Specialist API as market orders.
• Stop orders will participate in the Opening and Closing.
• Stop orders will not be included in the closing imbalance.

Thanks for writing.

Something you didn't ask about, but I'll answer anyway: What happened on this date in history?

Hint: And now for something completely different...

Second hint: It's...

If you haven't guessed by now, quit reading, you won't care. On this date in 1969, the Monty Python's Flying Circus troupe recorded their first episode, which aired a month later. The episode included the classic Funniest Joke in the World sketch, in which a literal "killer joke" becomes a translated weapon of war. Just the Wikipedia summary of the sketch had me laughing all over again.

Votes accepted here (use comment space below) for favorite Python bit. Pick one or nominate your own write-in candidate:

• Argument Clinic
• Dead Parrot
• The Lumberjack Song
• Nudge Nudge
• Self Defense Against Fresh Fruit
• The Ministry of Silly Walks
• Spam
• The Funniest Joke in the World
• Cheese Shop
• The Spanish Inquisition
• Dirty Vicar
• Twit of the Year
• Piranha Brothers

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Comments

I vote for three:

I'm Not Dead Yet, The Lumberjack Song and The Ministry of Silly Walks.

by Brenda on September 7, 2006 8:55 AM

This might not qualify since it came from a Monty Python movie, and not the television show, but apropos of our market structure, I would vote for the scene in The Life of Brian in which Brian is running for his life from the Romans, and tries to buy a mask from a merchant in the souk. Brian (who is, after all, in a hurry) tries to pay the quoted price, whereupon the merchant admonishes him --in classic Cockney, no less -- "No, no, no! You've got to haggle", and proceeds to conduct both sides of the negotiation himself.

by Daniel on September 7, 2006 9:30 AM

My own fave: the Spanish Inquisition.

"Nobody expects the Spanish Inquisition! Our main weapon is surprise. Surprise and fear . . . our TWO main weapons are surprise and fear -- and torture! Our THREE main weapons are surprise, fear and torture -- and an almost fanatical devotion to the Pope! AMONGST OUR WEAPONRY are ... " (that's from memory, but I bet it's pretty close. Also includes the comfy chair bit!)

by Ray Pellecchia on September 7, 2006 10:19 AM

My own fave: the Spanish Inquisition.

"Nobody expects the Spanish Inquisition! Our main weapon is surprise. Surprise and fear . . . our TWO main weapons are surprise and fear -- and torture! Our THREE main weapons are surprise, fear and torture -- and an almost fanatical devotion to the Pope! AMONGST OUR WEAPONRY are ... " (that's from memory, but I bet it's pretty close. Also includes the comfy chair bit!)

by Ray Pellecchia on September 7, 2006 10:23 AM

I throw my vote to Nudge Nudge.

"A nod's as good as a wink to a blind bat, eh?"

Best. advice. ever.

by Nicole Keeler on September 7, 2006 1:54 PM

What sort of Orwellian doublespeak allows you to suggest that decreasing the number of NYSE order types is providing “greater control and choice” to customers? Certainly customers who prefer to issue their own limit orders after a stock has breached a particular price level could engage in this behavior whether or not Stop Limit orders existed. I find it exceptionally disingenuous of you to make this absurd argument.

by Anthony Baraff on September 7, 2006 4:01 PM

Anthony --

Customers using stop-limit orders have less control and choice in how and when their orders are executed than those who send limit orders when their target price is reached. That's what I meant.

Orwellian doublespeak? Exceptionally disingenuous? Don't you think that's a little over the top?

by Ray Pellecchia on September 7, 2006 6:03 PM

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