Spreads getting bigger

[Gringotts Bank]

Spreads are getting bigger on midcaps.

When you own the depth (both sides), you can do what you want. And they do.

 

[Gringotts Bank]

Spreads are getting bigger on midcaps.

When you own the depth (both sides), you can do what you want. And they do.

Keep the depth thin and the spread wide. Then move the price away from any legitimate order on either side. Who would possibly trade it?

Makes me think I will need to do what they do. Get a half sized position, then offer that for sale on the top line in order to move the price down so I can get the other half. And maybe have a short opened at the same time. Ridiculous.

 

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Keep the depth thin and the spread wide. Then move the price away from any legitimate order on either side. Who would possibly trade it?

Makes me think I will need to do what they do. Get a half sized position, then offer that for sale on the top line in order to move the price down so I can get the other half. And maybe have a short opened at the same time. Ridiculous.

Ridiculous? Maybe - but effective if you get it right.

The alternative: Look for smaller-caps where the spread is only one tick, but volatility enough to trade swings. You still have to get the direction right, but there won't be a problem with liquidity.