As some of the regular participants to this thread know, I've been watching Intrawest of late (went long today at $23). This afternoon, I witnessed some market maker action that I thought you guys might like to comment on. Here goes...
Speaking with my broker a couple of weeks ago, I learned that most stock quote tickers don't bother showing trades that are less than full lots (I use StockWatch). But when you ask StockWatch to list the trades, you see every trade, no matter how small. Most traders won't see these of course.
So I'm watching the "list trades" for ITW today, and sure enough, there's all sorts of 80 share trades going on. Always about 25 cents higher than the highest trade shown on the ticker, and always with Levesque Beaubien doing both sides of the trade (you can get this info from StockWatch as well).
For example. As I typed this, ask price was $23.50. The day's high was $23.25. Yet when you listed the trades, you could see that Levesque Beaubien had crossed 5 blocks of 80 shares at $23.50, all without alerting the ticker that a new high had been established.
When a lot of 100+ shares finally did show up on the ticker, the ask jumped up to $23.75.
To me, this seems like a clever way for a market maker to accumulate shares without alerting retail traders of the fact. Seems like an interesting way for market makers to blind-side (and probably profit from) average retail traders.
I'd be interested to hear from you guys on this issue. Specifically, am I "seeing" things that aren't there, or is this a standard practice used by market makers? If it's the latter, is there are name for this kind of activity?
Any info would be appreciated.
Thomas |
