Buying or selling just one share?

[Eager]

I use Commsec as my broker and spend a fair bit of time, if I'm home on trading days, just looking, looking, looking (I only occasionally actually buy or sell). One thing I notice from time to time, when looking at the course of sales of a high volume stock , is that occasionally just one share is bought or sold. It appears as if it occurs as a stand-alone trade because the time stamp is unique. Unless the buyer or seller is completely stupid I can't see the logic in this, except...maybe an institutional investor might do this and is alerted when the trade happens, which gives him a trigger to complete a larger trade at what is then the market price...am I right, or is there some other explanation?

 

[pixel]

I use Commsec as my broker and spend a fair bit of time, if I'm home on trading days, just looking, looking, looking (I only occasionally actually buy or sell). One thing I notice from time to time, when looking at the course of sales of a high volume stock , is that occasionally just one share is bought or sold. It appears as if it occurs as a stand-alone trade because the time stamp is unique. Unless the buyer or seller is completely stupid I can't see the logic in this, except...maybe an institutional investor might do this and is alerted when the trade happens, which gives him a trigger to complete a larger trade at what is then the market price...am I right, or is there some other explanation?

Your guess is close enough: Instos have been employing this ruse for yonks.
It can happen for a variety of reasons, one of them being that a particular trade - short, U/, Crossing - is only permitted AFTER somebody else has traded the same direction. One share by a "friend" is all it takes.
Snice the introduction of algorithmic trading, aka robots or 'bots for short, contracts are now also bundled, rather than attracting a minimum brokerage per trade. That means, you can write an algorithm that accumulates (or distributes) a bloc of shares in small portions without drawing undue attention. Say you tell your computer to buy 5% of the lowest offer every 2 minutes. Or make that a random number of shares up to 5%.
Lots of reasons, and nothing much to read into it, except you know "somebody is actively trading here."

 

[marioland]

Thanks for this answer, pixel. I had the same question a week before and didn't get an answer to it.

 

[Eager]

Thanks pixel, I thought as such, but wasn't quite sure. It is actually a bit comforting to sometimes witness such events as they are usually buys instead of sells, as if the trick of the insto is to create the impression that the shares are in heavy demand due to the number of buy transactions instead of the volume itself, which could give some investors the impression that everybody is clamouring on board and they had better do so too. So, the price could soon rise, at which time the insto sells!

Since it was introduced I have found the Course Of Sales function to be a very useful tool, because it is easy to sort the real transactions from the crap ones to get a better picture of what is happening.

 

[Punta]

Interestingly, it seems that some exchanges aren't happy with buying and selling just one share. I put a bunch of single share orders through the LSE last week, to properly forward test a system, and IB just called me to say that LSE has complained, and that this is not allowed.

Seems kind of weird to me - it is a legitimate transaction.

Apparently "system testing" is strictly prohibited.

 

[Starcraftmazter]

In Europe they seem to be a lot more strict about this sort of thing.