Bid Higher Than Ask And Last Buys...Why?

Discussion in 'Order Execution' started by TurboSetch, Jan 17, 2006.

  1. Today I was patiently day trading a small stock "ISO" using DAS trader software when I noticed something I have never seen nor can I explain. So I am looking for anyone that could explain this to me. It happened 3 times today from what I could see.

    The first scenario was this:

    Stock was at Bid .35 Ask .37...All green buys at .37 going at this moment last was .37. Then during the buys the Bid went to .38 while the last price bought remained and continued at .37 and Ask was also .37 for about 1 min. Then of course the sellers got in and started dumping at .38 and the ask was then changed to .39. It was completely backwards from what I have seen in my experiences thus far.

    This happened 3 times on this stock. It looked like the price was being driven down or for some reason ARCA and NASD were buying up the shares at .38 while others were selling at .37. It was mainly ARCA that was doing it NASD seemed to follow later.

    What does this mean. I was reading in other news groups that this may have been some sort of PPS manipulation or a bear attack. Can shorts cause this? I thought that the books could be crossed but this just seems unlikely especially since it occurred several times. I also confirmed it on Ameritrades level II.

    Any input or references for research would be helpful. I need to understand this better.
  2. alanm


    AMEX/NYSE stocks do this often when the spec is showing a stale offer but won't fill you. People start bidding up on the ECNs.

    Hint: Jumping to conspiracy/market manipulation theories before considering other, more mundane technical issues, is almost always wrong.
  3. Thanks for the info. For the record I wasn't actually claiming it to be anything conspiracy related just wanted to throw that out there since I cam accross it during some reading.

    I have been a study of charts for about 2 years now and I just never ran into this sort of activity. The same MM's were also doing things like posting very small sized ask like:

    1 at .37
    1 at .38

    Just seemed different from typical activity. I have been working on reading the technicals on this stock but after today I think I'm done with trying to read this one.
  4. alanm


    It's not something you can see on a chart. It would look exactly the same as alternating sells and buys.

    The 1x size generally means that the quote is non-firm, and he will not necessarily fill you at that price.
  5. Yes your correct I was looking at the level II for that data. That makes sense though. It was really interesting the volume vs the movement directions on this stock today.

    While I am responding quickly I was wondering when you explained:

    "AMEX/NYSE stocks do this often when the spec is showing a stale offer but won't fill you. People start bidding up on the ECNs."

    Is there a term for this sort of activity? I would like to read more about it instead of asking you for more explanation.