Marshall--
Hope the new Daq rule will help; we'll see. But let's consider the online traders as well as the SOES bandits; as I've said before, sometimes it amounts to the same thing. If you watch, you'll often see dozens of tiny trades drive the stock price up or down, mms changing bid/ask every couple of minutes. In the few days I had access to the shhh... site I was absolutely astounded to discover how much activity there is in the 50-200 share range, and the effect it can have.
Gimme the big trades any day of the week; they're much less destabilizing in the long run. Not long ago somebody (an acquisition story, never mind) sold 2,222,222 shares of PLAT all at once, at 11:31 in the morning. This was, believe it or not, 4% of the shares out. And since all Daq trades print twice, the volume count looked even more horrific than it was. Result at the end of the day? PLAT, which had been trading at about 14 1/2, was down 1 1/8. Okay, it was obviously a negotiated sale, but if a whole lotta people'd sold 2 million shares in 100 share lots over a week or so, I hate to think what would have happened to stock price. (And the stock's made an extremely nice recovery since then, though it had a setback Friday, probably owing to confusion about the extremely poopy earnings posted by Platinum Software, an entirely different company.)
We Robots may have an easier time with the SOES bandits as of Monday, but active small traders will continue to contribute to volatility, in my view.
Janice |
