Replies to post #1866 on Value Microcaps Pick Six Lotto 02

[steeledge]

Len, I agree that the rule is necessary, but disagree that 1.39 was bogus. The b/a at the time supported that price as a real trade, but you know thinly traded stocks...a couple trades later and the Ask is $1. There's just no way to cover all the bases in terms of avoiding manipulation for a contest like this, so like I said, the rule is fine.

[researcher59]

lentinman: the 15% rule is a good one but may not be sophisticated enough to catch the enormous gyrations in illiquid stocks related to huge bid/ask spreads and tiny volume. Perhaps in the next contest the issue should be more thoroughly addressed.

For example, in the case of GAMM, the bid/ask spread was .50/1.39 for a substantial period of time yesterday afternoon, and at the extreme was briefly at .50/4.75 ! Of the 40k shares traded yesterday only a mere 1950 shares changed hands at over $0.70. Essentially the trades over $0.70 were all just 'window dressing' at the ask and do not represent any significant liquidity to sell at those prices.

If the opening trade on Monday is a buy for a mere 100 shares at 1.50, yet the bid/ask spread is still .50/1.50, then the Friday close becomes a valid price for purposes of the contest. But if the opening trade is a 'sell' at .50, then then Friday's closing price becomes invalid for trading. That leaves a lot to a 'chance' first trade on Monday morning, and in any case fails to address the lack of liquidity (so far) at prices above $0.70.

I don't mean to diminish or reject the fantastic gains realized by SSKILLZ1 and others who own GAMM in the contest, but do feel this issue needs to be further addressed in the next contest, to the extent that we are trying to emulate real life investing with significant sums of money ....

[researcher59]

lentinman: the last trade of the day in GAMM was in fact at $1.39 and was for 500 shares at 3:50pm with the bid/ask at the time at .51/1.39. At 3:53pm the ask was lowered to 1.24, then at 3:54pm it was again lowered to 1.23 and finally at 3.:55pm it was lowered to 1.08 where it remained at the close. The bid remained at .51 during this period.

I get this detailed historical information from Alphatrade which is a paid service that I recently subscribed to ....