Probably because theywould be under great scrutiny as to whether the mm's jiggled the price, dropped it down, to take out "your" stop. As well, if you know how the markets works, OTC especially, it could fall to your limit, bid by some other firm than the one you gave your order to, someone hits that bid, and the stock immediately moves back up. The firm legitimately could take you out on that one print, which wasnt even at their firm and might have only been 4 shares. Yet it would look kind of funny if the stock then jumped back up a 1/4 or so and the only prints at that lower price were those 4 and your 500.
Ultimately, it comes down to volatility and their position as a principal in the marketplace.
My firm takes stops but I face the same tough situation...lets say, no action in a stock and it tanks, it falls to your bid, one print at your stop, well, what do I do? Do I sell it, given that only 4 shares printed there which legally turned your stop to a limit or market order? You gave me an order, sell xyz with a xx stop. It hit xx, Ihave to sell it. How do I know it doesnt totally tank three minutes later and xx was agreat price. The only difference is that I don't make a market which might not make a difference since I might have to smack the bid as well. I can't gamble that the stock is going to recover. If I thought it was going to pop back up, I would BUY it not sell it. We all know its not that easy. The only saving grace which keeps us out of scrutiny is that we don't make markets.
Regards,
Steve@yamner.com
Regards
Steve@yamner.com |
