How institutions divide their massive trades?

Discussion in 'Trading' started by crgarcia, May 6, 2007.

  1. Do they just look at average volume and say: let's but X shares daily, during Y days.

    How their divide their daily trades?
    Or they just submit very large block trades to their prime brokers once a day.
  2. Surdo


    They certainly DO NOT read Elite trader for guidance!

    el surdo
  3. In small batches usually
  4. If they want to buy, they tell cramer to recommend a sell, then they pick up all the shares the sheep dump. Vice versa if they want to sell.
  5. Surdo


    Thats what the Boys @S.A.C. of Shit do, they hit a few institutions with 10 Lots so it looks like a "MO" call and then they hop on the bid down a buck on ECN's!

    This is not uncommon.

    el surdo
  6. slice and dice.

  7. uniafly


    Very good question ! I would like to know this as well..
    Anybody has any idea ?

    And please if you dont have to say anything valuable, then please dont write here at all..
  8. I have read where they will "mix it up". Make purchases at random times.


    I get the drift vwap is a goal to achieve a price target.


    A trading benchmark used especially in pension plans. VWAP is calculated by adding up the dollars traded for every transaction (price multiplied by number of shares traded) and then dividing by the total shares traded for the day.

    The theory is that if the price of a buy trade is lower than the VWAP, then it is a good trade. The opposite is true if the price is higher than the VWAP. In other words, a trade that is made at a share price lower than the volume weighted average price is usually considered a bargain.


    If the norm is to accumulate slowly (over a period of time), then the sells are 'dumped" all at once.
  9. Here's exactly what's meant by slice and dice orders and how its done:

    <i>Where, then, does the appeal of off-board trading lie for institutional customers? The answer resides in their need to control market impact costs by properly timing, pricing and sizing their orders while maintaining anonymity and virtual invisibility. To this end, they wish to see the trades and quotes of others without showing their own hand. Accordingly, with an electronic platform, they slice and dice their orders and trade algorithmically.

    But give institutions the alternative of transacting in size at prices they have confidence in, and they will take it. Institutions have found that they can get good size done with minimal spread or impact cost (if any) in a crossing network (such as POSIT) or in an ATS (such as Liquidnet or Pipeline) that offers dark liquidity and minimal information leakage (if any). The Big Board is moving in the right direction by itself providing a dark pool: In the first half of '07, trading is expected to start on MatchPoint, the exchange's own crossing network.</i>

    by professor Robert A. Schwartz
  10. Where is the SEC in all of this? The "market" then is just made up of daytraders and Joe Six-Pack. Anybody who has volume trades does it on pipeline or dark pools. No wonder there is no volatility anymore.
    #10     May 6, 2007