Det är omöjligt att ha en blogg om daytrading och inte nämna Harvey Houtkin.
Har du ett aktiekonto online? Har du tillgång till alla världens börser via din hemdator? Köper eller säljer du aktier på daglig basis utan att gå via din mäklare?
Ja då har du Harvey Houtkin att tacka för mycket av det!
Harvet Houtkin, den första SOES Banditen, kämpade hela sit liv mot etablissemanget på Wall Street. Han kämpade ensam mot de stora elefanterna för att den ensamma daytradern skulle få samma möjlighet av köpa och sälja aktier direkt elektoniskt via sin egen börsskärm, utan mäklare eller mellanhänder.
Harvey kämpade dessutom för att få till decimal spreads istället för fjärdedelar, åttondelar och sextondelar osv. Han åstakom mer under sin livstid än vad den amerikanska myndigheten SEC har gjort på ett helt sekel.
Jag är glad att jag hade möjlighet att träffa Harvey Houtkin ute på sitt gigantiska daytrading center i Montvale, New Jersey i mitten på 90-talet. På den tiden satt det mer än 5000 aktiva daytraders i USA och följde aktier som CSCO, INTL, MSFT och EBAY utan att släppa ögon från vad Goldman Sachs market maker hade för sig.
Day Trading Community Loses Pioneer Harvey Houtkin
Harvey Houtkin, a.k.a., “the father of day trading” has died at 59. The original SOES Bandit was a controversial figure on the Street, but like him or not, it is undeniable that the man paved some early roads for early day traders which ultimately brought us to where we are today.
Some may argue that Wall Street was years ago destined to become more self-directed with the internet gaining popularity and online brokerages coming available, but Houtkin is credited with discovering some of the earliest methods which scalpers used to turn quick profits in the markets via the NASDAQ’s Small Order Execution System (SOES).
Harvey Houtkin was one who helped make the term ‘direct access’ an everyday phrase for those involved in the markets. He also undoubtedly helped start the shift in the commission structure which Wall Street used to utilize. Can you imagine having to phone your broker today to jump in and out of some biotechs, and pay $1 per share in commissions? Ouch - no thanks!
He was a pioneer who started a revolution, and as a Bandit myself I am sure glad he shared his methods with the world and got people thinking in a different way about trading the markets.
Jeff White
President, The Stock Bandit, Inc.
RIP: Harvey Houtkin 1948 - 2008; Controversial "father of daytrading" / SOES bandit dies after surgery; was the hospital at fault?
Harvey Houtkin, the controversial "father of daytrading" and so called "SOES bandit" who showed thousands of daytraders how to exploit the Small Order Execution System (SOES) in the late 1990's, died after what was called "uneventful emergency surgery" in San Diego. Sounds like the hospital where the surgery was done has been in scrapes before, and is being implicated in his death via an anonymous email sent by a hospital doctor to the San Diego Medical Examiner alleging “erroneous, misleading and perhaps fraudulent” information on Houtkin's death certificate.
According to the San Diego Union Tribune:
Harvey Ira Houtkin, 59, who was dubbed “the father of day trading,” died at 9:25 p.m. – several hours after uneventful emergency surgery near his tonsils, according to his medical records. The cause of death was listed as natural: acute respiratory failure from a severe airway obstruction.
The medical examiner, Dr. Glenn Wagner, declined to do an autopsy because hospital officials linked the death to Houtkin's medical history, which included diabetes and a tonsillar abscess. Houtkin's body was flown to Florida, where he lived.
But on Wednesday, Wagner revisited the case after a Sharp Grossmont physician anonymously sent an e-mail to him alleging that the surgeon who signed Houtkin's death certificate gave “erroneous, misleading and perhaps fraudulent” information.
SOES är en förkortning av "Small Order Execution System" och är ett handelssystem på Nasdaq för mindre börsposter på upp till 1000 aktier. Den som lägger högsta/lägsta priset på marknaden står alltid först på tur för att få aktier köpta eller sålda.
SOES was first introduced in December 1988 for 25 stocks. The lack of liquidity after the 1987 market crash led NASDAQ to implement a mandatory system (since June 1988) to provide automatic order execution for individual traders with orders less than or equal to 1000 shares. (For stocks with low volume, it may be less than 200 shares). Market makers must accept SOES orders and so this provides excellent liquidity for smaller investors and traders.
There are several restrictions for those who use SOES, rather than a traditional Electronic Communication Network (ECN), to place their orders.
1. Trades may not be in excess of 1000 shares for a particular stock.
2. SOES does not allow trades in stocks that are trading at prices greater than $250 per share.
3. Once a trader places an order through SOES, they must wait at least 5 minutes to place a trade through SOES on the same stock.
4. Anyone doing more than five trades a day is considered a professional trader, not a retail customer, and can be thrown off SOES (Andy Kessler, "How we got here",Collins Publisher,2005).
5. Institutions and stock brokers are not allowed to place orders for their own accounts through SOES, but they can for a client's account.
6. Market makers must honor their advertised bid/ask prices to SOES orders, provided that they are for the amount that the market maker is looking for.
Initially, when SOES was mandatory, it was met with heavy pessimism from NASDAQ member firms because it forced them to execute all SOES trades that met the market maker's advertised price. There were also significant limitations implemented to prevent day traders from exploiting the system and taking advantage of old prices quoted by market makers.
SOES has revamped the trading market for individual investors. It has given small investors and traders the opportunity to compete on a level playing field with larger investors such as institutions for access to orders and execution.
En SOES BANDIT är ett amerikanskt slang-uttryck för en så kallad daytrader på börsen. SOES banditerna var pionjärer inom daytrading iom att marknaden inte ville att den enskilda lilla individen skulle handla själv på börsen. Bankerna hade en gigantisk spread mellan köp och sälj kurs och när börsen rasade 1987 så fanns det ingen market maker som svarade i telefon när du ville sälja dina aktier.
NASDAQ införde ett nytt system som kallades för SOES (Small Order Execution System), där alla var lika mycket värda oavsett storlek eller kapital. En market maker som fick sin köp eller sin sälj position fylld var tvungen att "reloada" eller förnya sin position inom 10 sek på börsen. Det var ett av grundkraven för att få vara market maker. Daytradarna spenderade hela dagarna med att lägga in köp och sälj ordrar innanför de stora aktörernas spread som oftast var orimligt stora.
Det resulterade givetvis att spreaden minskade vilket gagnade alla aktieplacerare på marknaden, men bankernas market makers som fick se sina fina bonusar och vinster minskade tyckte att alla SOES-traders var banditer :-)
What Does SOES BANDIT Mean ?
A slang term for traders who make rapid buy and sell orders, using the SOES system, in order to make a profit from small price changes.
So what is a SOES BANDIT ?
SOES bandits are individual investors who day-trade primarily through Nasdaq's Small Order Execution System (SOES). They attempt to predict short-term price movements of Nasdaq stocks by observing trades and changes in market maker quotes. We find that they usually hold positions for only a few minutes and usually trade profitably.
They do not exploit single market makers who have failed to update quotes, but usually trade before the majority of dealers change quotes. It is interesting that SOES bandits trade profitably against dealers who have as much or more information. We attribute this to the greater incentives of the bandits. Market makers are trading with the firm's money while SOES bandits are trading with their own.
Day traders were described in the preliminary prospectus for All-Tech (filed in 1998) as those who engage in the buying and selling of securities many times during the course of a day based on short-term price volatility. They typically close out open positions by the end of trading day in order to manage risk when the markets are closed. Positions are sometimes closed within minutes of the initial purchase or sale.
