Australian (ASX) Stock Market Forum

Huge spike in volume - why?

Joined
Aug 8, 2006
Posts
227
Reactions
0
What would be a likely cause of the volume spike on the 21th November 2014?

There is an announcement on that date but would that be the contributing factor for the huge spike?
 

Attachments

Triathlete

Keep it Simple..!
Joined
Nov 10, 2014
Posts
638
Reactions
84
What would be a likely cause of the volume spike on the 21th November 2014?

There is an announcement on that date but would that be the contributing factor for the huge spike?
Maybe there is some options on the stock that are expiring also.

There could also have been an off market transfer ( after market closed )
 
Joined
May 1, 2007
Posts
2,904
Reactions
45
As triathlete said, indeed it was an crossing after market

Credit Suisse did 15.8m shares @ $3.50 (last trade $3.80)
 
Joined
Dec 27, 2014
Posts
52
Reactions
1
Just an aside, it's these types of cross and other special trades that can distort the reading of volume on the Australian market. They occur out of the blue and are not related to the ongoing price action (not that all other types of trading volume is either). Would love to be able to filter these trades out.
 

tech/a

No Ordinary Duck
Joined
Oct 14, 2004
Posts
19,447
Reactions
3,701
Just an aside, it's these types of cross and other special trades that can distort the reading of volume on the Australian market. They occur out of the blue and are not related to the ongoing price action (not that all other types of trading volume is either). Would love to be able to filter these trades out.
Why?

Its a clear message that the big end of town are backing this to be profitable for them
That's what volume spikes are about.
Participants that make a difference.
 
Joined
Dec 27, 2014
Posts
52
Reactions
1
Why?

Its a clear message that the big end of town are backing this to be profitable for them
That's what volume spikes are about.
Participants that make a difference.
A good discussion item John.

This is something I have no direct evidence for, just an observation over the years. Nonetheless something I have a strong opinion on.

As I said these 'special' trades can occur at any time and be unrelated to the ongoing price action. You can find them for example on many a chart where nothing has been going on with the price action and nothing continues to go on after the large sized trade appears.

The trade would not necessarily be one that comes about overnight but is a result of a process (which takes time) due to a formal consideration of the part of the buyer and then locating another party with a motive for selling (or vice versa), with both parties coming to an agreement on quantity and price through a broker.

I think you will agree with me that we like to see volume that is related and provides a clue to price action.

Whilst someone at the big end of town may like it as you rightly suggest, there is another that may not. One could if inclined look into who the buyer and seller is and if possible establish the motive for the cross trade. For example, the recent massive cross trade on APN was considered a positive for the stock as it was the Murdochs who were the buyers.

When you look at how some cross trades can dwarf the surrounding volume on a chart I don't believe the 'weight' that would normally be assigned to that day's trade is warranted.
 

tech/a

No Ordinary Duck
Joined
Oct 14, 2004
Posts
19,447
Reactions
3,701
I don't disagree

I certainly understand that a cross trade where buyer and seller are matched
has no bearing on daily or weekly price action.
But as I have pointed out someone likes the trade. Sure you could argue that a seller or sellers matched aren't in harmony.

But perhaps there are some subtleties on the chart.

Volume 4.jpg
 
Joined
Mar 28, 2006
Posts
3,300
Reactions
669
Giday tech/a

I currently hold QUB and it is getting close to being evicted.

In the chart below MTPredictor attempts to tell me that volume is significant by changing the colour of the vol bar to red.
There are three vol/bar action combinations that I have highlighted that seem to stand out, particularly the last one where my understanding is that the sellers are there.

The only real explanation in the software manual is that these red vol bars are significant particularly at new highs and lows (bottom pic).

Is it possible for you to briefly comment on those highlighted points ?

(Current chart of QUB and pic of extract from help file - click either to expand)
 

Attachments

Joined
Dec 27, 2014
Posts
52
Reactions
1
I don't disagree

I certainly understand that a cross trade where buyer and seller are matched
has no bearing on daily or weekly price action.
But as I have pointed out someone likes the trade. Sure you could argue that a seller or sellers matched aren't in harmony.

But perhaps there are some subtleties on the chart.
and I don't necessarily disagree with you either when it comes to volume analysis in general, and considering that you are more of an expert in that area.

I simply wish to question the importance/relevance we would normally place on a high volume day for the reasons I gave below, when the high volume is as a result of a cross type trade. Also notwithstanding that the day in question may have been a light volume day (which can also be relevant) if it were not for the cross trade.
 

tech/a

No Ordinary Duck
Joined
Oct 14, 2004
Posts
19,447
Reactions
3,701
and I don't necessarily disagree with you either when it comes to volume analysis in general, and considering that you are more of an expert in that area.

I simply wish to question the importance/relevance we would normally place on a high volume day for the reasons I gave below, when the high volume is as a result of a cross type trade. Also notwithstanding that the day in question may have been a light volume day (which can also be relevant) if it were not for the cross trade.
On that day
As a cross
None
 
Joined
Mar 28, 2006
Posts
3,300
Reactions
669
Hi Boggo sorry I've been so long.
I've made some general comments on your chart.
Thanks for sharing this.
Thanks tech/a, much appreciated.
As with most things there are a lot of variables and those first two bars (first one in particular) had me wondering their value.

Cheers :xyxthumbs
 
Top