Increase in computerised trading for rigging the market

[Nero64]

Not sure if any of you saw an article in the newspaper a week or so ago about the increasing level of computerised trading to bid prices higher. Small offers were put in to move prices higher. The regulators are investigating and have already tried to clamp down.

I am currently long on a stock valued around $3.80, and 2/3rds of the transactions are like this:

7
1
0
3
6
5
16
24
62
33
17

my question is how could people sell such small numbers of stock. Wouldn't the brokerage costs negate any profit with just small amounts?

 

[lukeaye]

Very interesting, i have also noticed this. I have noticed in market depth often, very small lot sizes going through, which as you say, would be worth nothing as the brokerage negates them.

 

[bilo83]

Brokers pay an ad valorem trading fee (.% of trade value) so as long as they can book all the small trades before DVP it doesn't cost them any more than making fewer large trades. They wouldn't be able to do it at $20 a trade!

 

[nunthewiser]

algorythym trading ........... can be done through certain brokers ....... already threads and info on it here , try a search.

 

[condog]

yes it happens on all stocks yesterday even WOW was doing it....

They subscribe or pay the broker a monthly / annual fee to use thier trading platform and then get the per transaction fee either free or on a very low percentage.... in general they pay through th nose all up.....

I have no idea how prifitable it is as most the ones Ive known about quiclky dissapear, end up a scam, off with the money, etc etc etc

Just noise in the market, ignore it...but it does bave implications for those trading CFD, options and using stop losses etc......some of them seem to be copping silly triggers on tiny volumes......

 

[jono1887]

my question is how could people sell such small numbers of stock. Wouldn't the brokerage costs negate any profit with just small amounts?

There are brokers that charge an daily fee, $30/day to trade that stock as many times as you like.