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Strategies & Market Trends : Stock Attack -- A Complete Analysis
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To: J. Kerner who wrote (7455)3/30/1998 3:54:00 AM
From: Robert Graham  Read Replies (1) of 42787
 
Yes, some of the very large blocks are likely crossed trades which occurred at a price prearranged between the buyer and seller. This can be at a price lower than current bid and ask due to the size compared to current demand on the stock. A 300,000 is certainly very large compared to the normal daily trading volume on this stock. The float also could support a much higher normal daily trading volume that I have seen in the past on the charts.

I do think the size of the blocks could warrant a sale at a discount. Also crossed transactions do not necissarly have any impact on the regular trading that takes place in the market on this stock. It is interesting that the blocks transacted on a day with substantially increased volume. This was a sale that the seller was waiting to make into increased demand of the stock,which is wise. But I think the size of blocks seen that day may have been out of the ordinary, where I think the size should of placed downward pressure on the price of the stock, not upward pressure. In one example I remember, after one
very large block transacted, there was no setback and recovery of price even though it was followed by several couple thousand share sales. This leads me to believe that the MM was raising the price on the back of some of these large block sales. As long as the demand continues, they can get away with this even though the price rise is in part artificially induced. Now if the demand follows through on Monday, we will see how the stock repsonds tothe overhead supply. This will be very revealing. Also I think next week may be demonstrate more normal type of transactions that occur on a stock like this. But we will see.

Bob Graham
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