Explanation of T-trades - sourced by another well-
Post# of 1782
Posted On: 07/27/2016 1:53:55 PM
Explanation of T-trades - sourced by another well-known trader in the OTC market:
"T TRADES....The most important factor here is that the only requirement of market makers by FINRA is that they must report all trades in a day. They are not required to do so when the actual trade occurs.
To avoid creating “an unbalanced market”, market makers often do not report certain trades during the day to the public and then use a T Trade not to “scare” investors into thinking a market for that stock is going in one direction or the other at the spurring of one large investor.
If a market maker wants to accumulate a large amount of a stock in one trading day, that market maker may actually not report any of the trades that occurred until the trading day has ended so as not to alert the market to the collection. This practice is completely legal under the FINRA rules of the OTC Markets so long as the trade is reported at the end of the day."
This accords with my observations of trading over the last several days when the few trades appearing after hours were at prices that were not necessarily within the bid/ask spread at the close.
In the context of a low float stock like $MFST, I would consider 500K>1M+ to be a relatively large trade. It is exceptionally difficult to get more than 100K at any particular single price for anyone who hesitates when an opportunity first appears and you are not the 1st or 2nd to hit the ask.
"T TRADES....The most important factor here is that the only requirement of market makers by FINRA is that they must report all trades in a day. They are not required to do so when the actual trade occurs.
To avoid creating “an unbalanced market”, market makers often do not report certain trades during the day to the public and then use a T Trade not to “scare” investors into thinking a market for that stock is going in one direction or the other at the spurring of one large investor.
If a market maker wants to accumulate a large amount of a stock in one trading day, that market maker may actually not report any of the trades that occurred until the trading day has ended so as not to alert the market to the collection. This practice is completely legal under the FINRA rules of the OTC Markets so long as the trade is reported at the end of the day."
This accords with my observations of trading over the last several days when the few trades appearing after hours were at prices that were not necessarily within the bid/ask spread at the close.
In the context of a low float stock like $MFST, I would consider 500K>1M+ to be a relatively large trade. It is exceptionally difficult to get more than 100K at any particular single price for anyone who hesitates when an opportunity first appears and you are not the 1st or 2nd to hit the ask.
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"Per Ardua Ad Astra" - "Through Adversity To The Stars"
A very apposite motto for those who trade successfully in the OTC market..
All posts are my opinion - trade at your own risk.
A very apposite motto for those who trade successfully in the OTC market..
All posts are my opinion - trade at your own risk.
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