I just noticed that for the second time in about a week Ugly posted about not getting filled on an order to short an NYSE stock. Last week he missed an entry on AMR and today he missed TIE. Today he pointed out that:

I was way ahead of this one and I tried to short it below the bid. But a few seconds pass and a few orders and suddenly the bid becomes the ask and the bid drops without my order being filled. I hate shorting NYSE - Nasdaq orders happen instantly. I guess it just takes more finesse.

I also hate shorting NYSE stocks. They can be very tough to catch. In fact, I couldn’t get filled on ELN today as it hovered above 17. I know I would have gotten filled on the Nasdaq. But I actually managed catch TIE today at just about the same time Ugly tried to short it. The thing about shorts, even on the Nasdaq, is that with few exceptions, you need the stock to uptick to get filled. Because of the speed of Nasdaq is usually much easier to get filled once something upticks. On the NYSE, you’re at the mercy of the specialists.

There are a few things that I do to compensate for the NYSE’s slow a$$ fills. I think all of you know that I almost never use limit orders because I’m more interested in getting filled than saving a penny or two. Market orders (are supposed to) get priority over limit orders and therefore are usually quicker to get filled. However, shorting NYSE stocks is the one time that I’m much more likely to use a limit order. But if the stock isn’t in free-fall and the spread is tight I’ll try a market order first. If it takes more than 10 seconds to fill and/or the stocks starts running away from me (dropping) I’ll cancel the order and watch for another chance (a bounce) to enter. I’ll often just enter a limit order at or just below my original target entry price. Or, if the stock hasn’t dropped too much I’ll follow it down with a limit order until it gets filled or it’s dropped too far.

On the more volatile stocks, like TIE, I’ll try to enter a little early, before it breaks support. That’s what I did today with TIE. I saw it teetering about 5 cents above the low of the 11:00 candle. (see the chart below) I figured it would hit an air pocket if it broke that support. (You don’t get upticks in an air pocket.) The stock had basically been going sideways for several minutes so I just went ahead shorted it above support. That gamble paid off because it did indeed hit a little air pocket a few minutes later.

Because of the uptick rule it’s tough to short a stock right when it breaks support, unless it’s very liquid. The NYSE makes it even tougher. There are things you can do to increase your chances of getting filled but sometimes you’re just S.O.L. :-) I think that was the case with Ugly today. It made sense to try to short it under the bid. I’d say it was just bad luck that he didn’t get filled. This is why so many day traders focus on Nasdaq stocks.

Here’s today’s intraday TIE chart:

P.S. After I posted this I noticed this old post of mine in the ‘related posts’ section below. This was a juicy NYSE short that I couldn’t get filled on back in 2004.