Additional strange share transactions
As a follow on my last message, I have also seen some other strange transactions take place over the last few years on some stocks, like HYCT, SGER and OOAG. OOAG is basically a company that has nothing left and not filed reports in years but somehow the shares still trade. HYCT is supposed to be under all kinds of common share ownership restrictions but somehow I was able to get a common share. SGER is still in existence and annual reports are available from the company if you email them, so once in a while I did some transactions and the 'additional strange share transactions' are what I am going to relate to you.
Normally, in a stock with the on line system, there will be a bid price and number of shares for someone looking to buy, and also an ask price and number of shares for someone looking to sell. As an example, the HYCTW warrants will have a bid/ask of sometime like $0.05 for 10,000 warrants and ask of $0.10 for 10,000 warrants. The 'way to read this' is that the best offer to buy is 10,000 warrants at $0.05 per warrant and the best offer to sell is for 10,000 warrants at $0.10. When someone on the sell side lowers their price down to the bid, or someone on the bid side raises their price up to the ask, then they have hit the bid (or ask) and a transaction will take place at or near that price or better. Now, if you do not have level II access, or the stock does not have that level of trading available, we only get to see the best buy and sell prices and not anything beyond that. In most stocks, there will be level II quotes available and if you have access to that, you can see all of the other buy and sell orders prices and number of shares.
In a case of something like HYCTW with low volume and low number of units (shares or warrants) traded the market maker will usually step in an offer a block on the bid and ask of 10,000 so there is a market for someone in the retail market to work with. In the case of SGER, as an example, if you see 10,000 shares on the bid or ask, it will usually mean there are no other orders and the market maker is putting that there for trading, and the spread will be 100% between the bid and ask (ex: biud of $0.03 will have an ask of $0.06). One way to 'test' if the bid or ask is the market maker is to put out an order for more shares and see if the block increases by your order or if the block becomes your order. As an example, if I see SGER has 10,000 shares on the bid and another 10,000 on the ask and the prices are $0.05/$0.10; then it may be the market maker. I can test this by putting in an order to buy 11,000 shares at $0.05 and watch what happens to the bid. If the bid changes to 11,000 shares at $0.05 then I know it is me and only me that is the best offer to buy. Once in a while you can also, walk the bid down a little by entering lower bid prices and watching to see if you are still the best offer to buy or not. Eventually, when the price is deemed 'too low' the market maker will step back in and become the best offer to buy price again.
The 'very strange' things I have seen a few times is than I cancelled my order that was on the bid and it got filled at once, plus the price fell a lot for a few seconds. In theory this should not happen and I wondered if there was something wrong with the online system since the shares only trade once in a while and I could not see why or even how a retail trader would decide to sell to me at the bid just as I went to cancel my order.
I have also seen some people trying to tick a stock price up for the day and arrange to put in a buy at the ask at something like 3:59:45, meaning there would be no time for a transaction to go off on the ask. One time in another stock I was having some fun and telling people that I was going to crash the shares at the close (not hard to do since the company was virtually dead and had not filed reports in a few years and was surprised it was even trading) with something like a sell of 50,000 shares at $0.0008 or so and was shocked that I ran up against someone else trying to tick up the stock for the day with an order for like 100,000 into the last minute and having them throw an absolute fit when a second order of mine hit the bid and low for the day. The next day whoever was trying to 'paint the tape' and make it look like the stock was going up put in a but order for so many shares that it was not worth it to do my practical joke of hitting the bid in the last moment of the trading day. I also question why in the world someone would want to spend that kind of money since with my 'joke block' I was probably losing $20 ( 50,000 bought at $0.0008 and sold for $0.0004) doing it but the other person was starting to lost more than that trying to back stock a dead stock and doing it every day to make things look better than they were.
Louis J. Desy Jr.
