To all,
Has anybody out there been watching IRF trade the last two days? There's some funny business going on with the spread and I just wanted to see if anybody has any ideas about what's going on.
The stock has reached an asking price of 11 3/4 on several occasions the past two days and each time the ask size has been 50,000 shares even though the bid size has ranged from only 500 to 2000 shares. At one point today, the specialist flashed an ask size of 75,000 shares but quickly removed it. It is my understanding that the specialist doesn't have to show orders that are over 10,000 shares, so why would he (she) show an order to sell 50,000 shares when he (she) only has 500 or 1000 to buy? This makes no sense because it is unlikely that anybody would buy the stock at the asking price under those conditions and the person trying to sell would never get a fill.
Think about it: if you wanted to sell 50,000 shares of a stock and the bid size was only 500 shares, would you place an order to sell at the ask?? There's a fat chance that you would get filled and you would probably push the market down and away from where you want to sell. It's counter productive. Indeed, IRF hasn't traded one share in the past two days at 11 3/4. It seems to me that the only reason the specialist would do this is because he (she) is trying to fill a large buy order below the asking price and is trying to scare people into selling their stock.
I also thought it was pretty flaky that 5700 shares traded at 11 9/16 late today when the spread was 11 9/16 x 11 3/4 because the posted size at the time was 500 x 50,000. Where did 5700 shares of stock come from if the bid size was only 500 shares?? The final print was 9900 shares at 11 5/8 and the spread at the time was 11 1/2 x 11 11/16 with a size of 1000 x 11,000.
It seems obvious to me that the specialist is hiding stock on the bid side and the only logical reason is because he (she) is trying to scare people into selling to fill a large buy order at a lower price. Am I nuts or can somebody think of a better explanation for this?
Thanks,
Dan |
