"Coincidentally" for the benefit of the specialist

Discussion in 'Trading' started by Option Trader, Aug 27, 2006.

  1. Agree or disagree:

    When a retail trader(s) takes a gigantic position in a particular stock, and the specialist therefore is short the stock also in a big way, almost regardless of how well the stock is selected, the stock will usually "coincidentally" turn against him, and for the benefit of the specialist--to see if he can be squeezed out of the stock before it goes back up.
  2. if the retail trader builds his 'gigantic-R-O-R' position step by step the spec will have no clue who to fk and when...here u go problem solved no need to go into the dilemma.
    by the way you've been very generic; just depends of liquidity and volumes. i would not be surprised tho if it is the norm on illiquid crap.
  3. I've seen this happen so many times to a particular trader on not-so-liquid stocks, in spite of the fact that the stocks always have recovered in the long run--which shows they were well-chosen stocks.

    He told me that it's his understanding now that there is a totally legal way for them to find out the amount of your exposure by your broker, which would be utterly stunning if he is correct.
  4. to be fair it happened to me once on somethin' pretty thin, huge gap up and close to the highs...as soon as i went long..bang stock down 2% [tumbled just milliseconds after i initiated my pos], waited to see if it bounced since there was a series of long shadows on many previous candles and got out at 1% loss or so. ya, stock got back to the highs in no time and took 'em out in a half a hour. now there aint no way am gonna buy the highs on that crap.

    by the way who told u that stuff about broker informin' the spec about your exposure?
  5. I very often experience the same myself, i.e. the stock turning against me for about :20 minutes or so after taking a long position in a stock. IMO, the best way to take a long position is to wait till the size of the ask is small, then to take out the ask with a few hundred to spare.

    I believe the above is to squeeze day traders, and which is a main reason so many day traders lose money.

    But I was referring to also for long haul positions, with the stock being walked down 30-50% over a month or two, before eventually recuperating, whether done to try to squeeze him, or just to get the maximum gain for their own shorted positions.
  6. ror i often wait myself 'till size begins to lower big time on ask and increases on the bid but u gotta lift that ask if size is very disproportionate, that's a huge buy signal.
  7. of course its a game to them

    trade more liquid stocks :)
  8. A good example of when those $5 per trade brokers may come in handy.
  9. Alternatively, everytime once you learn something new about how the way they play their game, to take advantage. But it's good to see your confirmation of the same stuff.
  10. They have areas where they will run the prices around,

    They won't break serious resistance where a big player has put his money down. But note: They will drive price in the opposite direction once a large size order has been filled, then later 2-3 hours drive it back up.

    Something longer such as 15 minutes chart can hold well such as a bar low price.
    60 minutes even better etc.

    If they are breaking 15/60 minute lows, they aren't just painting the charts, <b> its meant to go down. </b>

    So its not always the specialist.
    #10     Aug 27, 2006