sitting on b/a

Discussion in 'Trading' started by dividend, Feb 19, 2007.

  1. Hello. I'm curious if there are any experienced traders that could tell me why would a very large open order just sit on a bid or ask while the pressure is obviously hitting it. (This is on NASDAQ). I would think I would want to back away from the pressure to attempt to get a better price while also drawing more interest to it.
     
  2. (1) Why? The customer probably has a longer-term time horizon. (2) The order might be linked to other stocks, options and/or indices. (3) The customer might believe they're picking a good spot to get a lot of size on the trade.
     
  3. but why would they sit there so obviously. sitting on the ask would scare the longs, imo.

    anyway, i think i answered my own question. the price continues to fall. today i saw the opposite happen. i think everyone got scared and sold.
     
  4. hidden liquidity.

    liquidity displayed is never actual liquidity
     
  5. could be right before options expiration and they are holding it back until monday, if you look at a lot of long term charts you'll see this over and over

    aapl 85s and 80s both expired worthless last week , everytime it went above 85.00 somebody came in with 34k for sale it went right back down, over and over for 3 days and today it blew right thru, not saying that this is you case but it happens all the time on options expiration week

    very important to watch options