Do some of the buys raise their price and some of the sells lower their price until they meet? I see this as a game of chicken.....somebody has to move in order to make something happen. Correct or totally wrong?
You got it!!!!!!1
Johnny, that helps to understand some....thanks!
One time I remember thinking the share price was going to drop prior to open. I needed to protect my investment at the time so sort of panic'd with a sell order. I forget the prices but for the sake of arguement let's say it closed at .40. After hours it had dropped a cent or two already. Then I sensed it was going to drop more during PM and maybe more after market opened.
Since I thought orders were based on "timing", I put in a sell order early in the AM before PM stats came on line. My thinking was that this would put me "in line" ahead of many other people who might be waiting to see what PM action was. Wanting to make sure my sell executed, I put in a limit sell at .34 for instance, figuring that it would execute higher than that but probably not clear up at .40 where the previous close was. I was expecting to be closer to .40 than to .34 however b/c I got my order in "earlier" than most......so I figured.
Unfortunatley, my sale executed at like .35 so I was unhappy with that. I rebought later for about the same price so no-harm really.
This is where I was really confused regarding how these things execute.....especially during AM or PM or even over-night bidding. What I'm hearing here is that "timing" really doesn't matter so much does it (unless the SP is going to blow through a number so quickly that your order gets missed)??? Do orders simply execute based on the two closest buy/sell orders at that particular moment?
I'll probably never be a day-trader!!!!! Thanks guys.
You got it!!!Originally Posted by RU Sirius
Underway, I think I have the same issues as you in understanding this process. I believe we are looking at this from the same angle.....I feel stupid....do you???
Another question: Why do you sometimes see a "lull" in trading on level II. For instance let's say there are 50k sell orders listed at .30 and 50k buy orders listed at .40. Here's this .10 gap. In theory this will just sit without any activity because the buy and sell can't match each other correct? What actually makes the transaction "happen" in this case?
Do some of the buys raise their price and some of the sells lower their price until they meet? I see this as a game of chicken.....somebody has to move in order to make something happen. Correct or totally wrong?Or, is this where the MM's jump in and put some of their blocks in the .10 gap to keep it trading in this channel?........thereby blocking action for the others until they decide to "give in"?
I thought I saw some of this the last two days. The sell side looked like it wasn't budging much. Lots of larger blocks sitting at .34 or .35 and just not getting any action. I think this is what you guys were mentioning during the day right? Normally on level II, if you see a bunch of large blocks of sell orders that aren't budging.......is that going to draw the SP up to it (minus any MM manipulation that is)?
BTW, my Yanks beat your Phils today. I know it's preseason but thought it would be fun to rub it in a littleNow you probably won't help me any more!
On another topic, I'd just like to add that I did my share this year to help the auto industry and SIRI.
I bought a 2009 GMC in January and am absolutley loving the fact that XM is fully installed. Can't believe that anyone with a new car wouldn't want to activate their subscription forever. Nothing better than having all the sports, the talk radio, CNBC, etc, etc. I bought XM a few years ago strictly for the MLB package. I used to tote my old mobile XM unit back and forth between my house and my car so I could listen to MLB during my hours of sitting in LA traffic after work! I love not dealing with all the cords and plugs, etc. now that I've got it factory installed in my new car. That is the whole reason that I started playing with stocks and especially with SIRI. This is a product that I believe in to the utmost and I can't believe this baby won't run up higher and higher. It's essentially a freakin' monopoly for Christ sake!!! We've got a good thing here.....just sucks that we're being held back. Good times ahead though.
Ok, if I know understand this concept........how do you look at level II and understand which way it's going to move? Isn't it a guess as to which side is going to blink first?
these days, you know which way the stock's going to move based on the number of 100 share orders are on each side. more on the bid side mean the MM's are walking it down. more on the ask side, they're walking it up.
rarely they lose control and we get a pop, but that's only when there is a great deal of volume. days like today, they do what they want.
it's best not to watch, or you'll end up VERY angry and writing letters to people who laugh at you. we've all done it, so don't feel bad.
Got it, King. That makes sense. Thanks. Yes, it is frustrating....I've spent way too much time watching that damn thing the last two weeks!
Don't think you can really make heads or tails of anything in AH can you? Just wait to see what it closes at come 8 pm EST huh?
Nah...don't feel stupid...it's just new. And, it's counterintuitive in a way. But, mostly because I really don't understand the function of MMs other than the formal definition that I've read. Why they would try to keep SP down doesn't make sense to me, nor does the various explanations on how they actually do that. But, that's okay. I'm not trading on the small variations, so it doesn't matter to me personally. I do appreciate that it is critical for those who day trade. They have to be on top of this stuff to make sure they don't get burned, and more hopefully, can make a daily profit, even on small fluctuations of SP. I would love to see this thing continue to rise week over week, but what I have learned here is that it is highly unlikely because big money is still on the sidelines. Not only with respect to SIRI, but in the stock market overall. I think we're starting to see the $ flow back to equities, so those of us with a lot of SIRI are tee'd up for a big win, assuming SIRI moves in the right direction as a biz....which I believe (and have gambled) they will.Underway, I think I have the same issues as you in understanding this process. I believe we are looking at this from the same angle.....I feel stupid....do you???
MM's(market makers) are brokerage houses who are authorized to conduct trades,alot of their clients are mutual funds,hedge funds and financial institutions who trade in millions of shares daily(think huge commissions)they all fight for their bussiness,so if a big boy says get me shares at this price,it is their job to do it or they lose their bussiness.so right now we have some who won't sell for less than .36 and those who won't buy for more than.33.
Hence when looking at level2 you will see 100 share blocks at .34,.3378,.3350 so forth to get the price down to get their peoples shares in,but now you have other MM's doing the same on sell side....hope this helps..
Yanks are Yesterdays NEWS RU,,lol just kidding,hoping to repeat this year!!!BTW, my Yanks beat your Phils today. I know it's preseason but thought it would be fun to rub it in a little
On another topic, I'd just like to add that I did my share this year to help the auto industry and SIRI.
I bought a 2009 GMC in January and am absolutley loving the fact that XM is fully installed. Can't believe that anyone with a new car wouldn't want to activate their subscription forever. Nothing better than having all the sports, the talk radio, CNBC, etc, etc. I bought XM a few years ago strictly for the MLB package. I used to tote my old mobile XM unit back and forth between my house and my car so I could listen to MLB during my hours of sitting in LA traffic after work! I love not dealing with all the cords and plugs, etc. now that I've got it factory installed in my new car. That is the whole reason that I started playing with stocks and especially with SIRI. This is a product that I believe in to the utmost and I can't believe this baby won't run up higher and higher. It's essentially a freakin' monopoly for Christ sake!!! We've got a good thing here.....just sucks that we're being held back. Good times ahead though.
