Jon,
Regarding, "...who's dumb enough to fall for this ECN flashing crap?", I think that a lot of nervous traders are "dumb enough". About six weeks ago, I was watching a stock in the pre-market on ISLD (can't remember which one). It's price was about $50. What was odd was that there were (5) 10,000 share orders about 2 levels below the inside bid. Every time the bid moved up or down, these 10,000 share orders moved up or down also, but THEY MAINTAINED THEIR POSITION 2 LEVELS DOWN FROM THE INSIDE BID!
A few times the price moved down quickly enough that they got hit for a few hundred shares, then they dropped again.
At the open, within +/- one second, ALL of the orders were disappeared.
Within seconds the price started dropping and it was down 4 points within about 10 minutes.
It seems obvious to me that they were flashing to prop up the price. A lot of traders believed them and bought at the higher price.
Since this was 50,000 shares of a $50 stock, the position size was $2.5 million. At that level, I think that we could probably rule out daytraders. I can only surmise that it was a Market Maker flashing to maintain the price while he was shorting through some another venue.
A lot of traders fell for it. (Fortunately, I wasn't one of them.)
Regards,
Dan. |
