On the NYSE,when a stock is printed down or up,let's say 50 cents,because of a big block trade,does the stock generally bounce right back up or down after the print?
Steve Cohen is still in my mind the greatest trader ever. The man has a 6th sense. I'd love to see the results of his personal account.
I'm wondering how common it is for brokers that execute these block trades to frontrun a block print?For example,if they have a client that wants to sell 1 million shares of an NYSE stock 50 cents below the current market price,do brokers short the stock right before the print and cover it on the print as well as go long on the same print?Does this type of frontrunning occur often?If so,is it illegal?
what you are referring to is a simple gap. now news. the catalyst is ONE large seller who is willing to take a price cut to unload all of his shares at once. yes people who know about this stuff do go short and cover on the pront. usually these are hedge funds who were solicited to take the print. it kind has a spiral effect but if you can catch them while they are happening they can be very profitable.
So basically,it's a risk free profit to the hedge fund or anyone else going short and covering on the block print?Also,if the profit is risk free,why wouldn't the brokerage firm just go short the shares themselves and cover on the print and go long instead of giving away free money to their clients?