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should be necessary for the purported auction sale of securities on the New York Stock Exchange. The computerized technology of today has already eliminated most of the specialist's function. |
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Nasdaq Is Flawed In Concept |
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Nasdaq is a negotiated market where hundreds of millions of shares trade each day, and Nasdaq wants to run the market like in days of old when only a million shares a day traded. Nasdaq was historically the market for smaller issues of newer, thinly traded stocks. The over-the-counter market was a negotiated market. Today, Nasdaq volume is even higher than the NYSE trading volume. Nasdaq's old advertising promoted Nasdaqthe "market for the next one hundred years." The enhanced volume has shifted the whole concept of Nasdaq from a negotiated market to a something else. A conceptual distortion arises. The question is whether Nasdaq can continue to be a negotiated market or must change to a more auction-oriented order-driven market? The stated belief of the NASD is that market makers should interact with all orders in a dealer-quote-based market as opposed to an auction-based market like the NYSE where buyer meets seller in a public and open forum. In an auction market, buyer meets seller without the need for an intermediary. A specialist on the NYSE only interacts in order to prevent unnecessary price volatility when there is no buyer or seller from the public. |
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Highly capitalized, widely traded stocks like Intel, Microsoft, and CISCO appear not to require a negotiated market. The dealer market of the past does not serve the investing or trading needs of the public today. Nasdaq wants to be the market of the future, but it wants to run it with the "pink sheet" mentality it used to run the market with 30 years ago. |
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The nature and the quality of many stocks trading on Nasdaq have changed. Nasdaq can no longer be a private resort. When you are expanding your business, you can't be a |
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