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Posted On: 04/05/2018 5:01:14 PM
Post# of 72443
You're postulating that there are buy orders at the same level as the stop-loss orders, in similar amounts.
That is quite unlikely.
It would be much more typical for stop-loss orders to be below the lowball orders that people place. People who are foolish enough to put stop-loss orders on low-volume stocks (which means it's much easier to take the share price down on low volume to take out the stop-loss) are unlikely to put such orders at a level that is close to the current trading range.
You are conflating two things: a possible stop-loss price, and lowball bids. They certainly do not have to be anywhere near the same prices. For instance, if someone wanted to put a stop-loss below the recent low, they might enter an order at .41 or .40. But, with the current range being about .52-.56, it is unlikely that someone is going to put their lowball buy order BELOW the recent lows. It is much more likely that when people talk about their lowball orders, they do not mean that they are putting their orders 20-25% below current market price. Rather, they are probably putting them in the high .40's. THAT is the level where I have recently seen some quite sizable orders, in the 10-20+k range.
For your premise to be correct (that premise being that lowball bids hurt the share price), someone would have to put their lowball order at exactly the stop-loss price -- or lower -- that someone else put in. And, no one else would put in an order that was between the current range and that stop-loss.
It's quite unlikely that these conditions would be met under normal circumstances.
HOWEVER -- if someone puts in a lowball bid that is ABOVE the stop-loss price, the manipulator has effectively been blocked from taking out that stop-loss order, unless they are willing to sell stock at the higher price to the orders above the stop-loss level to do so. That seems pretty unlikely, in this trading range.
Example
Bid/ask 0.52-.56 (huge spread for purposes of illustration)
Lowball orders: 10k at .48, 20k at .47 (I have seen both of these recently, simultaneously)
Moronic stop-loss order: 0.41
So the market maker has to fill thousands of shares at higher prices to be able to walk the price down. And there is NO guarantee that some investors, seeing the price moving down, won't decide that NOW is the time to buy some more shares -- thus making it even more expensive for the manipulators to take the price down.
I also think it is unlikely that there is a significant stop-loss position at this point. People who thought that a stop-loss at .42 or higher was safe have already been taken out.
I find your argument unconvincing.
That is quite unlikely.
It would be much more typical for stop-loss orders to be below the lowball orders that people place. People who are foolish enough to put stop-loss orders on low-volume stocks (which means it's much easier to take the share price down on low volume to take out the stop-loss) are unlikely to put such orders at a level that is close to the current trading range.
You are conflating two things: a possible stop-loss price, and lowball bids. They certainly do not have to be anywhere near the same prices. For instance, if someone wanted to put a stop-loss below the recent low, they might enter an order at .41 or .40. But, with the current range being about .52-.56, it is unlikely that someone is going to put their lowball buy order BELOW the recent lows. It is much more likely that when people talk about their lowball orders, they do not mean that they are putting their orders 20-25% below current market price. Rather, they are probably putting them in the high .40's. THAT is the level where I have recently seen some quite sizable orders, in the 10-20+k range.
For your premise to be correct (that premise being that lowball bids hurt the share price), someone would have to put their lowball order at exactly the stop-loss price -- or lower -- that someone else put in. And, no one else would put in an order that was between the current range and that stop-loss.
It's quite unlikely that these conditions would be met under normal circumstances.
HOWEVER -- if someone puts in a lowball bid that is ABOVE the stop-loss price, the manipulator has effectively been blocked from taking out that stop-loss order, unless they are willing to sell stock at the higher price to the orders above the stop-loss level to do so. That seems pretty unlikely, in this trading range.
Example
Bid/ask 0.52-.56 (huge spread for purposes of illustration)
Lowball orders: 10k at .48, 20k at .47 (I have seen both of these recently, simultaneously)
Moronic stop-loss order: 0.41
So the market maker has to fill thousands of shares at higher prices to be able to walk the price down. And there is NO guarantee that some investors, seeing the price moving down, won't decide that NOW is the time to buy some more shares -- thus making it even more expensive for the manipulators to take the price down.
I also think it is unlikely that there is a significant stop-loss position at this point. People who thought that a stop-loss at .42 or higher was safe have already been taken out.
I find your argument unconvincing.
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