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There seems to be this belief that the specialist is all knowing and all
seeing and can tell better then anyone else where the market is going.
There also seems to be the assumption that the specialist can take in hundreds
of thousands of shares with an inexhaustible bank. These are false
assumptions. The edge that the specialist has is that he has the
book and knows where the orders are. He doesn't know that they will
still be there if price gets to those levels because the order can be canceled.
He is supposed to make an orderly market, when he can. When not,
there are gaps down or up, or a halt in trading until orders can be matched.
The other edge that the specialist has is that he can participate in large
block trades. Say a mutual fund wants to sell 500,000 shares of xxx
stock. The existing price is $55. He can search for the other
side of that trade or he can look down in his book, add up all the shares
to buy below the current price until they add up to the 500,000 shares
for sale. He may tell the seller that he wants to participate in
the buy up to 35,000 shares. This is agreed upon. The specialist
then sells the first 35,000 shares in his book and takes all of the shares
for sale up to the 500,000. The cross might be at $54 or at $49 which
price has been agreed upon before hand. But there will be a orderly march
down there as the specialist knocks down the shares he is about to buy
back. I doubt that any specialist is going to take in a couple million
shares of QQQ in the hopes of a rally because he can't move the market
for more then a couple of minutes when the market is very thin. Especially
in the QQQ which are used buy every hedge fund or hedger as a vehicle.
There was one exception that I heard of. That was in 1987 when many
of the specialists were broke or negative and the government told the banks
to offer the specialists unlimited credit so that they could stabilize
the markets. It didn't help a certain bank in Chicago that went belly
up because of all those very smart market makers that went broke.
Remember that the market makers in stocks or options and the specialists
are taking the other side of everyone else's trade. They are not
instigating any of the trades. They are accepting bids or offers
and accommodating the public when there is no one else there.
Dorothy Carter wrote:
There is
no way to know for 100% unless you can see specialist book.. but when I
see this many blks clustered together it feels to me like a major mutual
fund buying and the specialist selling to them... It doesn't look to me
timing wise after a big upmove off of recent lows that we would be seeing
a mutual fund that would be that savy or short term oriented to sell a
long position here... so that tells me it is most probably specialist selling
what he had to buy on way down or setting up shorts that they
ride down again.... There is obviously two sides to each blk and the
specialist is the smart $$$So
if I'm reading this correctly.... it is distribution by specialists who
had to buy on way down starting on Sept 17th and lower.. also these
levels are back to Apr lows.. so if some institution bot at Apr lows rode
them up then got caught on way down would have sold Sept 10th or Sept 17th
and the specialist most probably took other side... I can tell
you that there were even more blks on QQQs, SPY, MDY etc on Sept 17 -19th...
so I'd guess as market improved and got everyone bulled up that specialilst
is unloading...
<blockquote
style="BORDER-LEFT: #000000 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px; PADDING-RIGHT: 0px">
----- Original Message -----
<div
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Ira Tunik
To: realtraders@xxxxxxxxxxxxxxx
Sent: Friday, October 12, 2001 5:18
PM
Subject: Re: [RT] HEAVY BLK ACTIVITY
ON QQQ'S YESTERDAY... I may have posted this yesterday..
Looks like short covering to me. How much of took place on
up ticks and how much on down ticks. that would tell a different
story.
Dorothy Carter wrote:
BELOW
SEE SERIES OF BLOCK TRADES ON QQQs yesterday.... THIS IS HEAVY..
NOT NORMALBLK ACTIVITY....opn QQQs --------------------------------------------------------------------------------
7:48 RT U.S. stocks seen
little changed to slightly higher at open
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 400,000 Shrs At 34.36
10/11 DJ PRESS RELEASE: AMEX
To Trade Nasdaq-100 Index Options
10/11 DJ =DJ Options Report:
Amex To Trade Nasdaq Index Options
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 1,000,000 Shrs At 34.16
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 466,000 Shrs At 34.30
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 350,000 Shrs At 34.35
10/11 DJ DJ MARKET TALK:
Nothing Good Lasts Forever
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 750,000 Shrs At 34.48
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 350,000 Shrs At 33.85
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 644,800 Shrs At 33.77
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 300,000 Shrs At 33.87
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 300,000 Shrs At 33.97
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 375,000 Shrs At 34.15
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 775,000 Shrs At 34.14
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 300,000 Shrs At 33.90
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 600,000 Shrs At 33.95
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 300,000 Shrs At 33.97
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 300,000 Shrs At 33.69
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 400,000 Shrs At 33.80
10/11 DJ DJ NASDAQ-100 Index
(QQQ) Block: 527,900 Shrs At 33.20
10/10 RT U.S. stocks press
higher on upbeat forecasts
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