InvestorsHub Logo
Followers 350
Posts 64289
Boards Moderated 0
Alias Born 07/28/2008

Re: cherokee_tear post# 178985

Saturday, 03/05/2011 9:24:32 AM

Saturday, March 05, 2011 9:24:32 AM

Post# of 344038
I know this about trade for trade---it certainly is better for retail. Trade for Trade is a discouragement of whats called "circular trading". For example--- a group can decide to push the price up by creating volumes in a certain stock. They can buy and sell a large quantity of that stock to push the price to higher levels.
Buying and selling large quantity of the stock may not mean a high cash outlay because the rolling settlement system allows for netting of buys and sells made during the day. Then, retail investors may enter the stock when they notice such high volumes and rising prices. That is when the group takes profits and leaves the stock to decline in value.
When stocks are shifted to the trade-for-trade , traders who use circular trading will have to pay for the total purchases. The large cash outlay is expected to deter circular trading. Also---no more shorting with T + settlement date.

People rain on your parade when they are jealous of your sun and tired of their shade