Australian (ASX) Stock Market Forum

Micro trades are driving me spare

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--Bots exist
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And are very expensive to run if only turning over piddly amounts of money.

--We know this because no one in his right mind would spend $10-15 to buy/sell stock worth $1.
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This is the kind of rubbish you get when you listen to people who talk without knowing. Only retail pays per trade. Brokers, insto and hedgies pay per share.

--To achieve their aim, a bot may buy/sell into itself to artificially manipulate the price, in order to force other traders to give up a tick here or there.
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This is wrong. You are not aloud to do this and there is ASX rules to stop it.
 
Trembling Hand said:
This is the kind of rubbish you get when you listen to people who talk without knowing. Only retail pays per traded. Brokers, insto and hedgies pay per share.
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DUH! No individual retail trader would spend $10-15 brokerage to turn over $1 worth of stock.. Not a stock trading at $1, but 10 shares in a 30c traded stock, eg.
 
Gringotts Bank said:
DUH! No individual retail trader would spend $10-15 brokerage to turn over $1 worth of stock.. Not a stock trading at $1, but 10 shares in a 30c traded stock, eg.
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Yeah. Your logic is cus its less than brokerage cost the only reason it could happen is to manipulate.

But you're wrong,

Again!
 
Gringotts Bank said:
Facts:

--Bots exist
--They exist even on very thinly traded and micro cap stocks.
--We know this because no one in his right mind would spend $10-15 to buy/sell stock of value $1.
--They are instruments of institutions
--Their purpose is to get a better entry/exit
--One known algorithm is "buy <= VWAP". Maybe there are others.
--To achieve their aim, a bot may buy/sell into itself to artificially manipulate the price, in order to force other traders to give up a tick here or there.
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Mate... you can't even separate facts from your interpretations of your observations.

Only points 1 and 2 are facts.
Points 3 and 4 are your deduction of these facts and probably correct.
Points 5 is just hearsay although it doesn't really matter in this case.
Point 6 is your own made up assumption. So don't put that under the heading of "Facts"

Gringotts Bank said:
In question:

--What other sorts of activities they get up to. I have strong suspicions that bots on certain stocks will jump in front of your trade with a string of tiny trdaes the moment they see it in the queue in order to get you to trade above your price. I can't prove it but it has happened a hell of a lot on AGI stock.
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How does bots "jump" in front of my trade? All orders join the queue following the same rules - there is no leaping ahead even if I am a small timer. If evil bought starts buying at the ASK while I wait at the bid, they are paying more and so benefiting the seller at the ASK. I have not lost my place in the queue, and haven't paid more than I want to if I don't move my bid.

I guess it's always easier to blame evil bots and instos for making the market difficult...
 
Trembling Hand said:
Yeah. Your logic is cus its less than brokerage cost the only reason it could happen is to manipulate.

But you're wrong,

Again!
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Why do 10 shares of a $1.20 stock get frequently traded throughout the day then?

skc, I'll concede point 7 is assumption only. Point 6 is fact - IB offers traders bots that do just that. Why in your opinion do bots exist and what are they doing? What is their game?
 
Gringotts Bank said:
Why do 10 shares of a $1.20 stock get frequently traded throughout the day then?

skc, I'll concede point 7 is assumption only. Point 6 is fact - IB offers traders bots that do just that. Why in your opinion do bots exist and what are they doing? What is their game?
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Think about it GB it isnt that hard!
Ill butter your toast a little later after youve had a think!
 
Gringotts Bank said:
Why do 10 shares of a $1.20 stock get frequently traded throughout the day then?

skc, I'll concede point 7 is assumption only. Point 6 is fact - IB offers traders bots that do just that. Why in your opinion do bots exist and what are they doing? What is their game?
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Sorry I can't count...

Only points 1 and 2 are facts.
Points 3, 4 and 5 are your deduction of these facts and probably correct.
Points 6 is just hearsay although it doesn't really matter in this case.
Point 7 is your own made up assumption. So don't put that under the heading of "Facts"

But your statement above, that IB offers traders bots that do just that, has in fact overturned point 4.

Here are some facts...

1. Bot exists and trade small parcels of shares through the day
2. The parcels are so small such that they are uneconomical for retail traders who get charged minimum commission of $10-$30 per trade.
3. It is illegal to buy and sell stock of your own to create the appearance of trading activity.

That is unfortunately all the facts you have. You may or may not understand what these bots are doing, but it doesn't lead to the conclusion that they are designed to to get you.

Based on the facts, one can make some educated deductions...

A. The bots are there so the instos can benefit (I think that's pretty logical).
B. As share trading is a zero sum game - the benefit to one insto is the loss to other instos and non-insto participants (again, just using pure logic).
C. Instos gain benefit with bots as they either improve entries / exits, or they reduce costs (there are probably no other ways of deriving benefits with bots).
D. Everyone can see the bots working - if it is something illegal the instos would want to hide it better.

Now, using the above dudctions, people will come to different conclusions.

Some people jump on B and C, and conclude that the instos are evil, manipulating the market and trying the scam retail traders. They scream to ASIC to address D.

Others may conclude that instos are just doing their business of moving stocks in small quantities at a time so as not to move the market too much (and hence achieve better entries and exits). If some silly retail trader wants to get influenced by that and jump to a trade... that's really the problem of the trader.
 
skc said:
Now, using the above dudctions, people will come to different conclusions.

Some people jump on B and C, and conclude that the instos are evil, manipulating the market and trying the scam retail traders. They scream to ASIC to address D.

Others may conclude that instos are just doing their business of moving stocks in small quantities at a time so as not to move the market too much (and hence achieve better entries and exits). If some silly retail trader wants to get influenced by that and jump to a trade... that's really the problem of the trader.
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SO you're saying it's to achieve a better entry than they would achieve without using the bot.

Here's a list of the smallest *$ value* of bot trades on AGI today.

And you're saying that buying $3 worth of shares helps them achieve a better price than if they bought a chunk of $30000 worth as it appeared on the sell side?

$3
$3
$3
$3
$5
$5
$5
$5
$5
$5
$5
$5
$5
$5
$5
$5
$5
$5
$8
$8
$8
$8
$8
$8
$8
$8
$8
$10
$10
$10
$10
$10
$10
$10
$10
$10
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$13
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$16
$18
$18
$18
$18
$18
$18
$18
$18
$18
$18
$21
$21
$21
$21
$21
$21
$23
$23
$24
$26
$26
$26
$26
$26
$26
$26
$29
$29
$29
$29
$29
$31
$31
$31
$31
$34
$34
$34
$34
$34
$34
$37
$37
$39
$39
$39
$39
$39
$39
$39
$39
$39
$42
$42
$42
$42
$47
$50
$52
$52
$53
$53
$55
$55
$55
$55
$55
$55
$57
$58
$58
$58
$58
$58
$60
$60
$60
$63
$63
$63
$65
$65
$66
$66
$66
$66
$66
$68
$68
$68
$71
$73
$76
$76
$76
$76
$78
$78
$79
$81
$81
$81
$81
$82
$84
$84
$84
$84
$84
$84
$86
$87
$87
$89
$94
$95
$96
$97
$99
$100

and you don't think these can be used as markers to add/reduce volume to the depth as they get taken out?
 
Gringotts Bank said:
have you got anything? Or just smart **** comment?
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Just smart **** comments.
Its an algorithm
what do you think its doing?

Look Ill type slowly for you.

Lets take a simple idea.
If a median price is X then trading below X initiates buying
the further away the more frequent.
If trading above the median then selling is initiated the further
away the more it sells.

It buys into sellers and sells into buyers
---you guys!

Now have you got anything??
 
tech/a said:
Just smart **** comments.
Its an algorithm
what do you think its doing?

Look Ill type slowly for you.

Lets take a simple idea.
If a median price is X then trading below X initiates buying
the further away the more frequent.
If trading above the median then selling is initiated the further
away the more it sells.

It buys into sellers and sells into buyers
---you guys!

Now have you got anything??
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Median price can be calculated at 4pm. And can be guessed at a bit earlier in the day, say 2pm.

Bots are active from 10am, and know nothing of future price movements for the day.

Your move smart ****
 
Gringotts Bank said:
Median price can be calculated at 4pm. And can be guessed at a bit earlier in the day, say 2pm.

Bots are active from 10am, and know nothing of future price movements for the day.

Your move smart ****
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GB really????

Its very simple.

Super fund XYZ calls up their Broker and says buy me 1 mil of stock ABC over the next week/month/whatever.

They turn on a dumb ar$e accumulation bot to execute the trades.That's their job.


But the amazing thing about this is exactly how does an order for $3 influence you?
 
Gringotts Bank said:
SO you're saying it's to achieve a better entry than they would achieve without using the bot.

Here's a list of the smallest *$ value* of bot trades on AGI today.

And you're saying that buying $3 worth of shares helps them achieve a better price than if they bought a chunk of $30000 worth as it appeared on the sell side?
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May be, may be not. That's the aim. Whether they achieve it or not, that's another matter. If say Insto A hit the ASK with 30,000 shares, people watching the depth, or other insto sell bots, might get spooked and pull their ASK out. Then Insto A would have to raise its own offer to achieve the volume.

Yes, they are trying to buy at a better price. If they are successful, the seller inevitably got paid a little bit less. But that's what everyone's trying to do. The size I trade these days aren't often on a single market depth level, so I manually split my orders to not move the market. Because I know that if I go for $30k in one hit, I will have to reach up for the next $30k. It's just economising your entries / exits, not manipulation. When you trade a large enough size, you'd be doing the exact same thing.

I can't see the future, I don't know for sure that splitting my own orders would guarantee better price, but that's my aim. Say there were $30k worth on the ASK, and I hit it $5k at a time. May be after 2 hits, the rest of the $20k on the ASK withdraws. On hindsight I should have just grab the $30k in one go, so that's the risk I take when I split my orders.

I also don't know what makes the algo trade $3 x 500 times as opposed to say $300 x 5 times, but the principle remains the same.

Gringotts Bank said:
and you don't think these can be used as markers to add/reduce volume to the depth as they get taken out?
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What does that even mean?

Trembling Hand said:
But the amazing thing about this is exactly how does an order for $3 influence you?
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Exactly the point I've been trying to express. They are doing their thing, you are jumping at shadows. Who's fault is that?
 
Gringotts Bank said:
Median price can be calculated at 4pm. And can be guessed at a bit earlier in the day, say 2pm.

Bots are active from 10am, and know nothing of future price movements for the day.

Your move smart ****
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Median price can be calculated every bar 1min/5min/60min/EOD/Weekly.
This is just an exampleand some clever quant will have an algo that will
Do something similar/better.

Check.

What's with the childish name calling.
 
I think you'll find that Tannin (the OP) was not referring to Bots at all.

Pretty sure his gripe was with piddly trades being placed by Brokers on illiquid Spec Stocks .....

I trade illiquid Specs, and what he is talking about is this:-

Lets say you have a stock with a wide Bid/Ask spread ie Best bid at 5 cents ...... Nearest Sell at 9 cents

You put your Bid in at 5.1 cents thinking "I might pick up a bargain" if some desparate Seller wants out at market:cool: .... Wrong!!

Some clever Broker will hit your 5.1 cent Bid with Sell of 1 Share (or whatever quantity tickles his fancy to either annoy you, or entice you to increase your Bid) share, then disappears for the rest of the month ..............

Result .... You pay Comsec $20 for your One share purchase, and the Broker most likely has a laugh at how easy it is to stitch up yet another Retail trader:D

Its all part of the game if you trade Specs ..... Best to keep your orders out of the Market Depth with the very illiquid ones:2twocents
 
Trembling Hand said:
GB really????

But the amazing thing about this is exactly how does an order for $3 influence you?
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Often with AGI, there's more than the minimum spread during the day, and this is when it can be a problem. Say the 'bid' is at $1 and the 'ask' is at $1.05. I think "ok I'll put a sell at $1.04 and be first in line". The exact moment I hit ENTER, 10 new sellers appear at $1.02 and $1.03. As these get hit, or if they get hit, new volume appears at 1.02 and 1.03, often bot volume, preventing me from exiting. Same occurs when trying to buy. So long as there is a fairly wide spread, they can play games and make you pay more, especially if you're day trading.

What skc keeps saying is that Insto B profits from any manipulation Insto A might be doing, but what if there's only insto A active? It can do what it likes.
 
Does not affect me, but it does annoy!

Worst is when my piddling order is purged because I am attempting manipulating the market!!
 
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