I was sitting around with time on my hands today so I watched the trading for a while.
It appears to me, that the reason for so much daily volatility lately can largely be ascribed to many Day Traders "chasing" the stock and the MM's having a field day with the Day Trader's STOP LOSS ORDERS. The MM's can see what you can't see, which is the actual volumes at each Bid and Ask Price Level.
Day Traders working with relatively small amounts of capital almost always have STOP LOSS ORDERS in to guard against a sudden downdraft erasing their (meager though they may be) paper profits. Especially with a Sub-Penny stock like CWRN which has recently soared
Let's say I'm the MM at Etrade for CWRN. I have LIMIT BUY Orders from MY CUSTOMERS for 5 Million @ .0026 BUT there are only 1 Million available @ .0026, BUT I see 4 Million available as STOP LOSS ORDERS between .0024 and .0020.
What do I do, but dump a lousy 5000 OF MY Shares (Shares held by Etrade to "smooth out" the trading) AT OR BELOW the HIGHEST ASK. That triggers the Highest STOP LOSS ORDERS, which Lowers the BID and the ASK, which tiggers the next Lower tranche of STOP LOSS ORDERS, and so on, UNTIL the LIMIT BUY ORDERS start to arrest the slide. Hopefully for me that doesn't happen until at least .0021 is hit.
Now I BUY for Etrade at .0021 - .0024, let the upside momentum take it to .0026, and finally SELL (maybe even to my own Customers) at .0026. VOILA!! Profits for Etrade and my Christmas Bonus looks better!!
This is "Front-Running" which is "essentially" illegal BUT is very simple to hide, at least on Pink Sheet Stocks which the Regulators would prefer didn't even exist, because they get tired of the avalanche of complaints, which all go in the circular file.
What I am trying to say is that with a volatile Sub Penny like CWRN, anyone who maintains "Tight" Stop Loss Orders in are essentially doing nothing more than making money for the Brokers. The commissions are so low now that it isn't even worth handling the trades, but they can (and have to)make a lot of money manipulating the spreads. It's their job.
Anyone who accumulates CWRN at anywhere near these levels will almost undoubtedly do VERY well.
SETTING THE RECORD STRAIGHT
Don't worry about the absurd comments made by Cotton's "spurned" ex-employees and/or others.
The standard legal load for a Mexican Heavy Haul "Gondola" is 40-50 Tonnes (yes thats a 2,204 Lb. Ton), 40 with a 2 axle trailer and up to 50 with a 3 axle, and there are hundreds available all day (and all night using extra drivers) long.
One truck/trailer can make a round trip mine to port in 4 hours between 7AM and 7PM due to traffic, and can easily cut that to 3 Hours at night, due to the lack of traffic.
Discount 24 Hours availability by:
loading at the mine (5 minutes each load)
unloading at the port(3 minutes each unload)
meals - 2 Drivers X 2 Meals @ 30 minutes = (2 Hours)
Fueling and Repairs - average of (1 Hour) per 24 Hours hauling
Bottom Line is each truck will average 5 Trips per 24 Hours and will cost around $10 per Tonne / ALL IN
RECIEVING and SHIPPING in Ensenada will not exceed $12 per Tonne / ALL IN
These are numbers that can anyone who works in Ensenada will agree are VERY generous, and can probably be cut by at least 10-15% through savvy negotiating.
Mining Magnetite is essentially the same cost as producing gravel, which SELLS HERE FOR NO MORE THAN $15 per TONNE at the Gravel Pit, and they make a profit on that.
Iron is actually a bit cheaper to produce because of its much heavier Bulk Density. i.e; a scoop is a scoop but the Iron weighs 50-75% more) Offsetting that advantage are higher blasting and crushing costs (Iron is harder and can be more abrasive)but the extra costs are diminimus in the larger scope of things.
CWRN will ship +62% Ore at a TOTAL FOB OPERATING COST (known as CASH COST in the industry)of no more than $35 per Tonne !!
Do the math!
Thats all the mining secrets for today class. You're excused, except for those of you who may have posted blatantly erroneous information, who have been assigned DETENTION.
I hope this helps "true" Longs to loosen those STOP LOSS ORDERS. Without them, new (and stronger) buyers will take the PPS up on their own as each passing week gets closer to the first shipment.
