5 ms·

What does that mean exactly?

by d_c 16y ago

yummyfajitas 16y ago
A more complete explanation than I can give: http://blogs.reuters.com/felix-salmon/2010/09/14/trillium-wasnt-quote-stuffing/ http://blogs.reuters.com/felix-salmon/2010/09/14/trillium-wa... Basically, it's submitting hidden sell orders at a high price, and submitting a lot of visible buy orders in the hopes that other people pile on and bid the price up to your sell order. It's market manipulation, and it wouldn't even work if you DOSed other people's computers. The goal is to fool them into filling your orders at unfavorable prices - a DOS would simply shut them down.
noname123 16y ago
When you look at quotes on Yahoo Finance, you are not looking at the whole quotebook. The whole quotebook lists the whole bid side and ask side. e.g., Bid Size Bid Ask Ask Size 100 4 4.02 50 50 3.99 4.03 200 The whole quotebook could stretch quite long depending on the numbers of buyers and sellers on the market. Algo's and human traders use the quote books to analyze sell or buy interest. For example, if the quote book has a lot of bid size and very little ask size, it means that there are a lot of buyers than sellers which could prompt traders to buy the stock at a much more expensive price in hopes that the stock will go up due to the demand. However, what Trillium did was that they stuffed the quote book with a bunch of buy orders just slightly out of money to make for the appearance of more buy interest. e.g., Bid Size Bid Ask Ask Size 100 4 4.02 50 50 3.99 4.03 200 300 3.98* 300 3.98* 300 3.97* Other algo machines or human traders will now jump to buy the stock at $4.02 (which Trillium is short selling) in hopes that the buy side's demand will propel the stock past $4.02. But what happens next as soon Trillium short sells $4.02, they will cancel the bid orders. Now the buy-side interest is back to normal, un-inflated side and whoever bought the stock at the inflated price is left holding the bag. The pricing of stock will go down due to reduced buy interest, Trillium buys to cover at $4, netting $0.02/share profit.

What does that mean exactly?

by d_c 16y ago

What does that mean exactly?

A more complete explanation than I can give: http://blogs.reuters.com/felix-salmon/2010/09/14/trillium-wasnt-quote-stuffing/ http://blogs.reuters.com/felix-salmon/2010/09/14/trillium-wa... Basically, it's submitting hidden sell orders at a high price, and submitting a lot of visible buy orders in the hopes that other people pile on and bid the price up to your sell order. It's market manipulation, and it wouldn't even work if you DOSed other people's computers. The goal is to fool them into filling your orders at unfavorable prices - a DOS would simply shut them down.

noname123 16y ago

When you look at quotes on Yahoo Finance, you are not looking at the whole quotebook. The whole quotebook lists the whole bid side and ask side. e.g., Bid Size Bid Ask Ask Size 100 4 4.02 50 50 3.99 4.03 200 The whole quotebook could stretch quite long depending on the numbers of buyers and sellers on the market. Algo's and human traders use the quote books to analyze sell or buy interest. For example, if the quote book has a lot of bid size and very little ask size, it means that there are a lot of buyers than sellers which could prompt traders to buy the stock at a much more expensive price in hopes that the stock will go up due to the demand. However, what Trillium did was that they stuffed the quote book with a bunch of buy orders just slightly out of money to make for the appearance of more buy interest. e.g., Bid Size Bid Ask Ask Size 100 4 4.02 50 50 3.99 4.03 200 300 3.98* 300 3.98* 300 3.97* Other algo machines or human traders will now jump to buy the stock at $4.02 (which Trillium is short selling) in hopes that the buy side's demand will propel the stock past $4.02. But what happens next as soon Trillium short sells $4.02, they will cancel the bid orders. Now the buy-side interest is back to normal, un-inflated side and whoever bought the stock at the inflated price is left holding the bag. The pricing of stock will go down due to reduced buy interest, Trillium buys to cover at $4, netting $0.02/share profit.