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Huge Volume no Price Change
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Created: by Fr33B1rd Attachments:0

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Huge Volume no Price Change

 
Novi Sad Serbia
 
 
Posts: 13 since May 2018
Thanks: 5 given, 8 received

Huge Volume no Price Change

Over the years I traded stocks I sometimes noticed huge volume spikes and no change in price. Huge volume as in 4-5 times the weekly average volume in one trade but price action would continue on as if nothing had happened. There's no way 2 large traders happened to meet at the same time on the bid, especially on some of the less liquid stocks with large spreads.

Anyone have ideas?

Freebird

 
 
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Athens Greece
 
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ClearLog's Avatar
 
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Could you give an example of the stock ? I mean the symbol

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Novi Sad Serbia
 
 
Posts: 13 since May 2018
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The last time I saw it happen was a few months ago in PHX on the TSX. I did some digging and saw that a cross trade occurred. I thought that wouldn't register as volume since it happens off exchange.

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Market Wizard
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deaddog's Avatar
 
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Fr33B1rd View Post
Over the years I traded stocks I sometimes noticed huge volume spikes and no change in price. Huge volume as in 4-5 times the weekly average volume in one trade but price action would continue on as if nothing had happened. There's no way 2 large traders happened to meet at the same time on the bid, especially on some of the less liquid stocks with large spreads.

Anyone have ideas?

Freebird

Could be block trades by institutions. Set up by dealer/broker used by both institutions.

When you talk you are only repeating what you already know. When you listen you might learn something new
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Chicago, IL
 
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Most likely institutional block trades. Typically you will see absorption at 2-3 price levels both above and below the bid and ask price with large buying or selling at ask or bid, this sometimes can be a good indicator of the short term direction, typically you would want to see >500+ trades in the direction you are aiming at (long or short) at the price levels near the bid/ask spread in order for the price to move, this just my opinion but it does work for me.

--bofh

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Novi Sad Serbia
 
 
Posts: 13 since May 2018
Thanks: 5 given, 8 received

Thanks for the reply guys. I think I will have to read up on how institutions move stock or futures. There's no way they can show their hands in the open market so they do the block and cross trades you guys mentioned. I just don't understand how the volume gets recorded if it's a private transaction between 2 institutions. I guess, how does the exchange find out the transaction occured and record the volume traded if it's a private transaction?

Sorry if these are bad questions but I've wanted to ask people this for ages

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Chicago, IL
 
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Fr33B1rd View Post
Thanks for the reply guys. I think I will have to read up on how institutions move stock or futures. There's no way they can show their hands in the open market so they do the block and cross trades you guys mentioned. I just don't understand how the volume gets recorded if it's a private transaction between 2 institutions. I guess, how does the exchange find out the transaction occured and record the volume traded if it's a private transaction?

Sorry if these are bad questions but I've wanted to ask people this for ages

Usually this type of transaction can be executed on the trading floor (as an example or between a broker and a trader). They will agree on a price for a number of contracts lets say a block of 1k contracts at 1000 a contract, just an example. Once they agree respective buy/sell order is entered on the brokers side and is then filled and then the trader/buyer acquires the agreed number of contracts. Sometimes you can see delayed prints on Time and Sales i.e. 2k contracts at 1000 while the bid and ask spread is at 1000.25 and 1000.50, as the broker/trader agreed to that amount a few minutes/seconds beforehand.

--bofh

 
 
Dallas Texas/USA
 
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Why high vo,ume and no price movement

I believe these occur for two reasons.
1. Block trades are occurring, and must be reported, but the Market Maker is temporarily absorbing the trade.
2. The Market Maker has moved the herd into the desired direction and is now actively trading in the opposite direction of the herd.


 



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