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Here come the A trades
hi dryland
I think that is the best explanation of the trades reported erroneously I've read - it was what I was trying [but failing terribly lols] to explain to another investor.
Thank you!
R's
BN.c
That should be on a dma share the market makers....
On a do a share the market makers don't normally determine the spread, the spread determines the market makers.
For solg for the last few days, they are sat at around 24-26 to 27-28.. When the price drops they probably pick up shares sub 26p, then then offload them at 26-27p if circumstances will.
The auction doesn't normally have market makers in it, unless they want to take part through dma.
This morning for example we saw a lot of A Ts 200k or so at 26.5p in 10mins they were booked as buys but would have been a sell and a buy together. The ask has been pretty persistently hit with AT trades.
i think the issue with trying to analyse trading action is muddied due to the lack of transparency making it almost impossible to have a definitive picture of what is happening. Very unlikely for a MM to be left holding the baby that's for us PI's unfortunately. However if they are short they can remedy the problem pretty quickly as long as the share is liquid which SOLG is.
I was in BMN for a few years and one of the posters on that board was doing a daily analysis of trades over a fairly long period but it got to the point that their calculations led them to believe that the MM's were short of 20m or 30m shares but it was never resolved. It all got a bit out of hand and they stopped publishing the analysis but some PI's were taking it as gospel which it clearly wasn't.
My take on things generally is fairly simple these days otherwise you can go round and round in circles trying to work out what is happening.
Thanks for your constructive response drylands and I understand about A trades, and I also understand that the 'algorithm' on LSE allocates buys and sells based on the mid price at the time...
But before posting my question I examined all the bargains for the day and allowed for that variation...
Surely MMs still determine the spread, so unless one or more are the wrong way with their books day after day I still have a problem.
There is no escaping the simple question that if the total value of buys is a multiple of the sells and ALL those buys have been done at 26.5p or less (even down to below 26p...and the UT is 100k plus shares at 26.5p, someone is losing monet day after day...or at least one of the MMs is being 'sandbagged' by an operator like RBC in the background...?
This is a useful debate I hope..?
@RK the MM's make their money on the spread so the more trades the better for them. Bear in mind this is not MM driven stock just have a look at how may A trades there are. A trades are placed by broking houses, hedge funds, investment banks, any large trading org, and PI's with DMA. The spread is pretty tight so the software LSE and others use doesn't always calculate the ratio of buys to sells correctly as it depends on the mid-price. Also A trades can be placed at whatever level the trader wants which can make the calculation even harder.
Is there anybody here who has direct experience of how MMs work?
There is something very odd here...day after day...
Take today...
We have 1.75 million buys and 700k sells...
The SP having opened over 27 spent the entire day below 26.5, but...
All the bargains at the end of the day were at 26.5p and the Uncrossing Trade is 102,878 at 26.5p
I was under the impression that MMs were in business to make money, so how can they do that when they sell £464,000 of stock to punters all day at under 26.5p and then buy in stock at the end of the day at 26.5p...
Any enlightenment please? (Not opinions, facts...)
Thanks Red
Nothing appears as it really is with mm’s
Looks like MMs are quietly hoovering up stock at well above the bid...I'm bid 26 for 100k (cf 25.85) and 25.81 for 200k...
Just letting you know...