RE: Big late reported trades7 Jan 2021 18:26
Never had this explained to me ..this may help some out there.
Why are buys showing as sells?/There are more buys and than sells and the share price is falling!
One question that is regularly thrown around on bulletin boards, for the stocks and shares is "Why is my buy showing as a sell?" or "Why is my sell showing as a buy?".
The simple answer to this is that buys are showing as sells and vice versa, because the algorithm used to determine these trades is outdated and decidedly more useless than it would have been thirty years or more ago:
Effectively, a trade is given a "Buy" or "Sell" status depending upon which side of the mid point price of the Bid/Ask spread the trade lands on.
e.g.
Bid= 2p
Mid Point= 3p
Ask= 4p
My trade is filled at a price of 3.1p and is therefore shown as a "Buy" by the system.
Now, errors occur because the actual Bid/Ask spreads at market prices aren't necessarily the same as those that are "officially" listed and used by the algorithm.
I would add, that as more firms are making markets and as brokerages become more price competitive, we've seen a gradual tightening of spreads over the past thirty years, which is the cause of this problem.
When market spreads are nice and wide, this system does actually work accurately, with a smaller level of error