Who is on the other side of KM Trades?

Discussion in 'Trading' started by nitro, Feb 6, 2002.

  1. nitro


    I have been watching KM from the corner of my eye for a week. Tens of millions of shares traded every day, with block prints going off all the time. If you look intermitently, you'll see 200000 shares on the offer on the way down.

    Who the heck is on the other side of these trades?

  2. nitro


    Just saw 1,000,000 offered !! Displayed by the Specialist!??!!

  3. nitro


    Oh, and BTW, the spread is _ALWAYS_ no worse than 2c wide, and when the 1M offer showed up, the bid STAYED a penny below it, and it STAYED there.

    Someone is picking at that million, now down to half a mil. Any way to figure out who is selling and who is buying? It has to be a HF, as I don't know of a trader with balls big enough to buy into that.

  4. take a look at the volume on a daily chart. Notice those multiple days down in a row than huge volume at the bottom.
    That is the specialist dropping his bid heavily so that he can hit stops and take as much inventory as possible to lower his cost.

    He can dump it a few days later since he was forced to buy. It's a very high probability pattern I love to play

  5. nitro



    I am trying to understand your strategy carefuly. Are you saying that you like to:

    1) Look at daily charts
    2) With a stock tanking
    3) Then spot a day where the volume is clearly going to be enournous by comparison to other days

    Then, intraday, try to pick "the bottom" and enter a long position?

  6. Hell NO!!

    NEVER INTRADAY!!!!!!!!!!!


    Wait for the bounce.


    (it will have to show strength for the day) by going positive which means it is above the closing price of previous day.

    For my overbought/oversold strategy

    I only go long stocks that are positive for the day

    and short stocks that are negative for the day

    I only play the longs on a positive day
    and the shorts on a negative day.

    The trend is your friend. I'm a daytrader so I trade the one minute bar trend but I like to have the specialist on my side and the odds are heavy if a stock has moved multiple days in a row in one direction with volatility and a volume spike the specialist has inventory to get rid of or has a huge short position he wants to cover.

    Entries are usually done in the first 30 minutes after an hour and a half no more trading. Just peel off shares.
    Robert Tharp
  7. The shorts on my list tonight aren't that great and due to the selloff the # of longs are too many ( I usually have 20 and pick 4 to watch)

    In a few days I'll post my watch list for a day or 2. For my overbought /oversold system. It is also available through a daily email from www.oneminutetrader.com but I'm sometimes lazy and forget to send it to them. I just scan for multiple days down in a row with volatility and multiple days up in a row with volatility add a filter for over 200,000 shares daily volume and NYSE only (this works great with NASDAQ but I've become great at tape reading and prefer NYSE stocks now.)

    The specialist becoming the buyer of last resort
    which is his job.
  8. nitro



    Thx for both replies. I too trade off the one minute charts, mixed in with one or rarely two higher time frames.

    This strategy is totally beyond my current scope - it seems to be a variation on the breakout, plus a deep understanding of the function of the specialist, and perhaps something more that is beyond the mechanical...

    The nice thing about this "pattern" is that I assume that your stop (mental or otherwise) is a tick or two below the previous days' close, giving it a very well defined exit.

    I will be looking forward to your post in the next couple of days...

  9. rtharp

    Is this the same strategy as the Great New Pattern that
    Praetorian2 uses? Or is it different? It seems I remember
    him trying to pick bottoms intraday. Or at least pyramiding
    into the perceived bottom?

  10. Can I ask why this strategy would also work for Nasdaq stocks?
    There wouldn't be a specialist that had inventory to get rid
    of, but then again I guess shorts would have to cover...
    #10     Feb 7, 2002