OT:
James J. Cramer concurs....
Here's a piece by Cramer on the game of after hours trading, though it's not about IATV, I couldn't help but think of the board when I got near the end of Cramer's saga... enjoy...
Wrong! A Trip Through the Badlands
By James J. Cramer
Join me in a trip to the Badlands, the strange after-hours
market in
stocks, the last great trading frontier. I was there
tonight, alone, armed
only with an Instinet machine, intent on trading Yahoo!
(YHOO:Nasdaq) after
the conference call was over.
I liked what I heard. Oh, it wasn't only the guidance and
the firm tone of
management, or the buzzwords and the letter-perfect
execution. What I liked
about it -- and what I would despise about it if I were
short -- were the
effusive congratulations offered by each analyst before
questioning the
company. That's a security blanket that makes you want to
take stock with
gusto.
Except that's not the Instinet game. After-hours trading is
an art form,
one that exists at a level that rivals the most rigorous
poker games for
their bluffing and outrageous bidding. Your confidence in
your hand must be
supreme, and your judgment of your nameless and faceless
opponents, both on
the buy side and the sell side, must be perfect.
For those of you who have never traded after-hours,
Instinet is a
customer-to-customer market in which you can advertise
where you want to
buy and where you want to sell, just like in Web trading.
Tonight, as the
Yahoo! conference call drew near its conclusion, I wanted
to buy 2,500
shares.
On the screen was someone who wanted to sell 1,000 shares
at 214 and
someone who wanted to buy 1,000 shares at 210. That's a
pretty typical
market for after hours, ride enough to drive a Peterbilt
through, yet so
thin as to be impossible to get anything "real" done. As
much as I trade
after-hours, I find myself constantly on the defensive, and
rarely as
confident as I would like to be, and I regard myself as
being fairly good
at the game.
My goal: to get 2,500 shares in as cheaply as possible.
First, we type in a
211 bid for 1,000 shares. We wait a minute and nothing
happens. But someone
offers 1,000 shares at 212. Here's the first decision. Do I
take it,
knowing that the call is going well, or do I wait to see if
the seller hits
me?
Before telling you what I did, picture this. There are
maybe 25 people
looking at this trading. If I take it, that will be a sign,
an aggressive
sign, that someone is betting this stock is going to go
higher. If I wait,
and I get hit, that might be a signal that someone believes
the stock is
going lower.
Now, add another dimension, the short sale. You can short
after-hours
without waiting for a higher stock price (a plus tick, as
it is known). So,
it is possible to be hit by a short-seller and have that
short-seller
create an impression that this stock is going lower in
after-hours trading.
I chose to pounce and take the thousand at 212.
Immediately, right at that
very moment, the seller offers 2,500 shares at 212. (Or at
least I think it
is the same seller, as you can't tell.)
Ooooh, I think to myself. A gamesman. The guy wants to make
the stock look
heavy. That's a master ploy, meant to both frustrate the
buyer and
establish the market as one that doesn't lift. Very
demoralizing for the
buyers. Great for the shorts.
I bid 211.5 for a thousand.
Whack. I'm hit. Brutal. Now the pattern has been
established. There are
sellers, they want out. I am cannon fodder, I think to
myself. Maybe I am
wrong. Maybe the call's not that good. Second-guessing.
Maybe a downgrade
coming? GeoCities (GCTY:Nasdaq) deal not closing in time?
Dot-com run over?
(Told you you had to have confidence to play this game.)
I bid 210 for a thousand. For three minutes, nothing
happens. So I get more
bold. I move up to 211 for 1,000. Nothing. Nobody whacks
me. I am like the
mouse jumping out for the cheese, and the cat/seller seems
to be asleep.
Next I take the 212 offering for 1,000 shares. Now I have
bought more than
I want, but that's okay, because I like the stock. I feel
like the cheese
Next thing I know, someone comes in and takes the stock
that is still being
offered at 214. Then another buyer sweeps the stock, taking
everything at
215, 216 and 217, all the way to 218.
I'm in like Flynn, I figure. Ready to rock. Holy cow, I am
up six points in
three minutes. Even for the Net, that's something.
is mine. Gorgonzola.
And then what happens? Guy comes back, offers 2,500 at 212.
Told you this
was the Badlands. I am cursing the guy because he's the
master. He knows
how to make a buyer feel like a moron. He's good. He's very
good. He has
wrecked whatever good feelings may have been caused by that
stunning sweep.
I bid 210 for a thousand. If he hits me, then I know the
Badlands are going
to bleed red.
And then I wait. Nobody hits me. And he waits. Nobody takes
him. Two
minutes. Three minutes. Five minutes -- this is a lifetime
in the
after-hours business. An eternity.
Ten minutes later, that's still the market, 212 last.
The number of people viewing the screen has gone down. The
number of people
who want to play rapidly diminishes. It's 6:15 p.m.
Time to go home. My time in the Badlands is over. Looks
like the stock's
going out about where I bought it. Until tomorrow, when the
authorities
re-emerge and the rules change and all of this trading
won't mean a thing.
Good night. |
