When the market moves...

Discussion in 'Trading' started by BobbiDigital, Dec 28, 2011.

  1. Any market, though I am mostly referring to equities - 'In general' are one or a small few big buyers/sellers enough to give the market direction during high volume times of day? Once this period is over obviously it can stay, reverse, or continue.

    Since price has to move I just wonder if it is 'pushed' by the big players since HFT's are all knowing anyways, and they shake out the little buddy that chases like clockwork.

    The alternative I guess would be 'more buyers than sellers' but this seems like b.s. since when the market moves it moves and the 'opening price principle.'

    I have not worked for a big institutuon, and I am continually trying to learn more about market mechanics. Would appreciate any real insight here.
  2. back in the days when nasdaq had market makers, one told me he could move the market (in an individual stock) by an eighth, maybe a quarter for about ten minutes.
  3. on the otherhand, Warren Buffet can move IBM even though he doesn't want to, especially when he's trying to buy 6% of the company.
  4. moving a stock is nothing. anyone can move a stock if they are willing to overpay or sell 2 cheap.

    the really good ones do it and get you to buy and sell at a bad price.

    this is the secret to Jack Hersheys billions

    or is it Jack Billions Hersheys, I always get confused.

  5. It's not a sure thing. I don't trade stocks, but on more than one occasion as soon as I buy it goes down and as soon as I sell it goes up. Am I moving the market? I don't know you be the judge.
  6. Between spreaders and HFT's there is always going to be bids and offers even after a substantial spike - when you ask who would be chasing this (of course not when you really need it). But they are still reacting be it faster than everyone or with a hedge. So are the 'big players' just playing one obnoxious game of cat and mouse with each other? e.g. buying/selling programs based on pricing models after they get 'new information'

    We have seen all markets are correlated - efficiently arbitraged so most volume is meaningless. It makes me think a very small percent of participants are responsible for 'moving markets' Thus all it would take is a nudge in either direction to allow directional momentum to build on itself.
  7. plyka


    Any big trader can move a market up or down if they wish. The problem is that it's irrelevant. For someone to move a market, they need to buy or sell a huge amount of assets, depending on the direction. But the problem is always that they know own or are short the asset once it has moved, and for that big guy to get out of the position, he is going to be doing just as much buying or selling as he did when he moved the asset in the first place.

    So the trick is not very easy. It's not moving the market, because anyone can do it. It's moving it and building a market for it so they can move out without losing their profits. This is a much more difficult task and takes a true professional. They are professionals and they take huge risks, but they have existed since the markets began, and continue to exist to this day.

    Governments on the other hand, they are a different story entirely. Of course this includes central banks. They don't care about losses and so they can manipulate most things. I should say, they can manipulate paper assets indefinitely, although they have much more difficulty with real assets like commodities. It doesn't matter how much they print, they can't create more gold, wheat, et al.