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Strategies & Market Trends : Free Float Trading/ Portfolio Development/ Index Stategies -- Ignore unavailable to you. Want to Upgrade?

To: dvdw© who wrote (2730)	10/25/2008 9:14:43 AM
From: dvdw©	Respond to of 3821

As of July 2007 the uptick rule was abandoned, AHHAHA provides this excellent description of what happens in its absence.Anyone watching closely knows that the raids described below are the active metric in managing the direction of the artifact price. Note also that these endless chains of transactions are occurring systemicly without regard to Locating anything at all. From: ahhaha of 12237 I'm not claiming the uptick rule has an effect on averages. It only tends to prevent raids. I can formally define raid, but leave it at a series of sales, never buys, which causes the MMs in conjunction with computer automation to progressively back away in an exchange rule governed way. The players use the machines to launch raids by implementing block sales via fractionation. Members are paid by the number of trades they make so they have the machines programmed to break up bigger lots into round lots, "fractions". When one trader or MM launches an "auto", the other side must automatically retreat the bid or ask. The exchange limits how fast and what size one may "back away" from supporting these prices away, but the exchange doesn't limit repeated series of a back away set. Doing so would confound the market Example: You sell 1000 ABC. When it executes you get these lots: 300,200,100,100,100,100,150,50 It would have been all round lots, but 300 and 200 lots had execution priority either from precedence or preference, time or size, from a market order to buy on tap. The exchange limits how far apart in price these lots can be, but the exchange does not and cannot limit "runs", "raids", where repeated series of fractionations are at progressively lower prices. So the result is far greater price movement occurs than would occur if series of fractionations required a change of state between them. The second series would have to be queued to wait for an enabling change of state. There are lots of complicating factors governing how all this should be properly set up in order to emulate the old single lot uptick rule, but it is doable in automation.