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1dd1..More likely pre-market tape-painting, IMO. eom.
SI report today. Could be interesting.eom
"The velocity of the selling on Friday was so great, Cramer said you couldn't get in front of it. The sellers were willing to sell below were you wanted to buy, he complained."
Deja vu all over again. Re-instituting the uptick would have stopped this "bust-out". Though the forces that got it removed are still in charge. Might be too late.
Yeah. It is the "machines". My point was (and is): what are the intentions of those using the machines? For GS and other domestic entities it is obvious: money. For others who are not driven by greed, I submit it is the destruction of our economy and our country.
Hadn't seen this before my last post.
High Frequency Traders Manipulating the Nasty Sell-Off?
Published: Monday, 8 Aug 2011 | 5:40 PM ET Text Size By: Lee Brodie
Producer
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Did the whoosh lower on Monday have anything or everything to do with high frequency traders gaming the system?
According to Jon Najarian the short answer is yes.
And he’s not just talking Monday’s move. He says everything that’s happened in the market since last Wednesday deserves to be the subject of this debate.
Najarian is particularly irked by a move made on July 5, 2011 to increase the capacity of the Consolidated Quote System (CQS) used by the exchanges to 1 million quotes per second – that was a 33% increase.
”The high frequency firms pegged that,” says Najarian. “In a turbulent market (regular investors) can’t even see what’s going on. You have to be one of them."
In other words, Najarian believes high frequency traders are able to use the speed of electronic trading to mask the bids and quotes in the marketplace.
The practice is sometimes referred to as quote stuffing and involves high frequency traders who place 'buy' and 'sell' orders and then cancel them microseconds later in an attempt to slow down the prices seen by regular investors on their financial systems or websites.
”There were times on Monday when latency (slowdown) kicked in and people had no idea (what was happening.)” Although the whole process is complex and confusing – suffice it to say the average investor does not come out on top.
”Guys get lulled in by the machines and then smacked down," explains trader Tim Seymour. "It wreaks of manipulation!”
"(And) because of the machines, things are happening much more quickly and much more deeply," adds trader Joe Terranova.
Any way you add it up, the traders say, it equals trouble.
Jon Najarian thinks its time for the Street to take a stand and he hopes that happens amid reports that regulators have issued subpoenas to firms that engage in high speed trading. "We need the SEC and CFTC to step in and say 'no more.' They're really disrupting it for everyone else."
(For an in-depth look at high frequency trading and the practice of quote stuffing click here and go to New Way High-Speed Traders Get Edge on Investors by Fast Money executive producer John Melloy.)
"IT TANKED AS HE TALKED"...(drudge report).....There was a time, not too long ago, that market participants could count on the fact that the market moved significantly only if the reason for the move was not known or unanticipated. The downgrade was anticipated, yet there was an unrelenting follow-through for the entire day. Why was that?
Was it significant that today it was announced that "regulators have subpoenaed high-speed traders"? Unfortunately the government is one step (or more) behind the perpetrators. GS and others have owned the SEC and the majority of our law makers for a while now and have crafted a market where, through a lack of an uptick rule, sponsored access etc., they can make money every single day, no matter what. The problem, as I see it, is that while domestic hedgies, GS and others are "innocently" just responding to their innate greed, others who would love to see, and indeed are charged with, the demise of the "infidels" are gaming the system in the same way, for different reasons.
Jiff, Dmiller...Why do you think that is? That CNBC skews things to the downside? Just curious.
GBR... I applaud your earlier analysis. It is very refreshing to have someone, who is obviously aware of all the issues, make a reasoned assessment of our position. Very tired of the WAGs, the newbies who have no clue and those with very transparent agendae. Thank you, JMO.
Triangle...No offense... But do you believe that a company worth somewhere between $5 and $20 B is going to listen a participant on a chat board? Get real.
Alaska gk....That could be just about anything. Could be two separate or affiliated funds doing a pre-arranged cross-trade. Could be a market maker filling an order, after looking at the book and realizing he can short enough to hit stops and cover at lower prices. Also, there are many "trades" that happen outside what is considered the OTC market. I wouldn't read anything into it. JMO.
Nic... It was not my intention to scare you. Buying calls with your downside defined is much different than selling puts, where it isn't. Good luck.
IQ...In that scenario, you could theoretically buy the puts back at $30. He either way, not pretty. Good luck in your investing.
I certainly hope your good fortune continues. eom
Nic.. (OT)...Sound reasoning...eom.
OT.. Good luck with that. eom.
IQ... Please take my advice. Don't bother to get the paperwork. Selling puts is a very, very dangerous thing to do. I learned the hard way in 1987, before I became a broker. You could lose everything, and more. Especially in this market. JMO.
JMS....This is what is happening, but only a small part of the problem. These are the main factors in the ability to move markets down at will:
1) In today's market, 70% of all equity positions (long or short) are held for 11 seconds or less. (this is essentially what you are referring to)
2) Sponsored access. Among other things, this in essence allows traders direct access to the exchanges without using a market maker. (But allows them to trade with the favorable rules under which a market maker operates)
3) Short trades are now not subject to the uptick rule. (Removed in 2007, months before the 2008 swoon in the market).
4) No controls on short-term naked short selling.
All these factors subject the market to the whims of miscreants who are stealing your money day-in, day-out. The dive of the market has less to do with the debt crisis, the housing market, unemployment, etc. and more to do with the ability of some entities to move the markets.
When Goldman Sachs reported their 2010 Q1 results, they proudly noted that their trading arm had not lost money even one day during the quarter. I have not heard any such boasting since. Why? Be cause eventually someone is going to say, "wait a minute, these guys can't be that much smarter than everyone else". They have it gamed as do many other entities.
So, if GS and hedge funds can drain the system as they are doing as we speak, it doesn't take a genius to see that others can do the same. Others like the Russian mob, Al Qaeda-type groups, the Iranian government and countless others who wish for the demise of the US.
Danny Detail.......Given the expanding number of interested parties do you think that one might soon leave the fold and make an outright bid, turning the process hostile? TIA
Uh-oh....I notice Herb "the shill for shorts" Greenberg is on CNBC. If there is an interview, I hope he is not involved.
Thanks Jim...Can't wait to see which way this will be spinning.
Whoa there nic....You have let your defensiveness impede your thinking process. I applaud and respect all those who have seen the inherent value in IDCC and have backed it up with real money. However, this in no way, shape or fashion means that they know how the market, on a day to day basis, works.
Danny...You got it right. Most on this board don't even have an inkling of how today's markets work, let alone the IB process.
JMS...And I hear you. My advice was a general proposition. There have been 2 occasions, very similar to the IDCC one, where I made big money. I hope you do in this case. I know I will w/o options.
Nic... What I am saying is that others with more information and money than anyone on this board have already made the market. I am not saying that IDCC will not be sold. I believe they will. The value of the options tell me that a) we are not close to a deal or, b) if we are, it is not at the prices those with way-out-of-the-money options hope for. JMO
Like I said, there are always exceptions. eom
weeble and jms....Some free advice from someone who spent 20 years in the industry: those who buy options (puts or calls) LOSE. Those who sell options against a position win with the caveat that more often than not leave a lot on the table.
Are there exceptions? Of course, but I would be happily surprised, for your sake, if I am wrong. As we discussed earlier today, the "Chinese wall" is a farce. If there were a deal pending at a valuation anywhere near your projections, the stock would be considerably higher, irrespective of the current market situation. I hope, for your sakes, I am wromg.
JMS, OD....The "chinese wall" concept is what was in place when I was in the industry (1988-2008). I am surprised (actually not really) that this has not changed. Anyway, it is virtually impossible to prevent information leaking through the wall between M and A and investment management. It simply will happen.
JMS....The Constitution gives Congress the right to create laws that allow patent holders to exclude if they want and other rights in patents.
This is why I doubt the veracity of the report. Be that as it may, I agree with your assessment if indeed it is happening. Thanks.
Joel.....Does this "news" seem a little fishy to you? The DOJ is going to inquire what the new patent owners' intentions are? They are going to head off any would-be abusers of patents intent on harming another operating system? I don't think so. No wonder it is unconfirmed by DOJ. More FUD. IMO.
GBR, JMS......When I read that NJ said IDCC could make $10/share in 2011 and $20/ share in 2012, I stopped reading any analysis by him. JMO
Thanks, MTJ...eom.
A PATENT FEVER OVER SMARTPHONES..Today's NY Times. 2nd business page. Can't find the online version. Very positive mention.
unless one considers the fact that getting it now will be cheaper than getting it later for an acquirer.
This is true unless those who are now claiming that patents stifle innovation, (and in the specific case of wireless IP are used for blocking of others' rights), are successful in their new initiative. To me it seems they have a long row to hoe.
JMS....Good analysis of the Dealreporter charade. Just the mere fact that a conversation between two lawyers ( or anyone ) is put forth as "news" is laughable.
I actually first saw the story when a friend and past fellow broker of mine emailed it to me. He is a major "producer" and his short book is as significant as his long book. His comment was "shorts working hard on IDCC valuation". Believe me, he would know.
MY3S...No question in my mind that this "conversation" was fabricated and trotted out to put a lid on the stock. For what purpose or for whom, one could only speculate.
OD...Not only that, I know some good lawyers but none of them are capable of determining valuations.
The opening today will be another amateur hour. Those putting in stop losses will do just that: lose. Anyone considering a stop-loss should just sell unless you would rather sell lower! MO
OD... Thank you for your relentless commitment to truth. Eventually, this is what the internet will be all about. In the interim it takes those committed to reality to continually call out those who would attempt to distort it. Thank you.
MT... I don't think so. Google's general counsel, Kent Walker, is very naive, typical of a newly successful tech company. Consequently, I think Google will miss this opportunity. Apple, knows the game and will, once again, outsmart them, to our benefit. IMO.
Monterey.. Make a note of who turned an expected result into a negative and never trust them again. After all, I have to assume that, if we are imminently taken out of our position in IDCC, the resultant profits will be reinvested somewhere. It is a jungle out there!