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I agree specialists are not all knowing
and they are not always the other side of the trade... However If I can see a
set up which has the earmark of them selling longs and setting up their
book short....... They are smart money....
people who have studied this activity for yrs..
ie Richard Ney would indicate that the circumstances and timing of these QQQ
blks are most probably as I suggested... specialist selling longs he was forced
to buy on the way down and then setting up shorts to ride on the way
down....... They are a profit center.... not just there to take the other
side of the trade. If their only purpose was to provided an orderly
market.. the minimum that they have to take 100 shs before they can
lower the price of the next trade would have long ago been changed to at least
1000 shs in this market place where even 1000 shs is by many standards an odd
lot. In order to call a block desk at a brokerage house many require 5000
shs or more... So. I post this info from my
experience... and it does take some time to get a feel for it.. use it if
you find it worthwhile .... JJJ
<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: <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>realtraders@xxxxxxxxxxxxxxx
Sent: Saturday, October 13, 2001 2:03
AM
Subject: Re: [RT] HEAVY BLK ACTIVITY ON
QQQ'S YESTERDAY... I may have posted this yesterday..
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
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----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Ira Tunik
To: <A
href="mailto:realtraders@xxxxxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxxxxx>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 <FONT
size=-1>--------------------------------------------------------------------------------
7:48 RT U.S. stocks seen
little changed to slightly higher at open <FONT
face=Quotrone> 10/11 DJ DJ NASDAQ-100 Index (QQQ)
Block: 400,000 Shrs At 34.36 <FONT
size=-1> 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 <FONT
face=Quotrone> 10/11 DJ DJ NASDAQ-100 Index (QQQ)
Block: 466,000 Shrs At 34.30 <FONT
size=-1> 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 <FONT
face=Quotrone> 10/11 DJ DJ NASDAQ-100 Index (QQQ)
Block: 750,000 Shrs At 34.48 <FONT
size=-1> 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 <FONT
face=Quotrone> 10/11 DJ DJ NASDAQ-100 Index (QQQ)
Block: 300,000 Shrs At 33.97 <FONT
size=-1> 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 <FONT
face=Quotrone> 10/11 DJ DJ NASDAQ-100 Index (QQQ)
Block: 600,000 Shrs At 33.95 <FONT
size=-1> 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 <FONT
face=Quotrone> 10/11 DJ DJ NASDAQ-100 Index (QQQ)
Block: 527,900 Shrs At 33.20 <FONT
size=-1> 10/10 RT U.S. stocks press higher on upbeat
forecasts
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