Unusual market depth

[AlterEgo]

Is anyone here able to shed some light as to what the significance/purpose of the multiple orders of 508 shares is in the market depth screenshot below? Why would anyone place multiple orders of the same number of shares at the same price like this?

 

[cutz]

G'Day,

Some traders may break up large orders to distribute into the market rather than put on one big order, although i would have thought that a sophisticated platform can also distribute at varying volumes.

 

[MS+Tradesim]

It's an algo or bot dripfeeding stock. The idea is usually to achieve VWAP or something similar.

 

[AlterEgo]

It's an algo or bot dripfeeding stock. The idea is usually to achieve VWAP or something similar.

So is this likely to be an institution distributing a large amount of stock? Would seeing this action on the ask generally be regarded as a bearish sign?

However I’ve noticed this bot is also putting the same sized orders on the bid as well. Is this a bot attempting to profit from the spread?

 

[MS+Tradesim]

So is this likely to be an institution distributing a large amount of stock? Would seeing this action on the ask generally be regarded as a bearish sign?

However I’ve noticed this bot is also putting the same sized orders on the bid as well. Is this a bot attempting to profit from the spread?

I don't know. Could be anyone for any reason. But distribution/accumulation targeting VWAP is probably the main use. I would think instos or brokers with large clients would use this to avoid moving the market. Prop shops using bots would be another good guess, I think. Retail traders can do this too. For example, IB offers algo orders.

 

[AlterEgo]

ok, thanks MS+T. I was just curious as to what it's doing. It's currently got orders on the bid at 50.5c and orders on the ask at 51.5c

 

[jono1887]

How is placing multiple orders at a single price any different to placing one big order at the same price? I dont see how either one would prevent shifts in the price...

 

[nulla nulla]

How is placing multiple orders at a single price any different to placing one big order at the same price? I dont see how either one would prevent shifts in the price...

On the contrary, a big sell order may force other sellers to come in lower. A big buy order may force other buyers to come in higher.

 

[nulla nulla]

Take a look at the tight price range that GPT has turned over in the past two days. Yesterday in excess of 340 million shares turned over in the range $0.44 to $0.485. If the seller (s) simply banged it all in as one sell order, the price would have dropped like a brick. By drip feeding the sale throughout the day, the broker(s) handling the disposal/acquisition were able to acheive a tight spread and a voulme weighted average probably within a range sought by their client.

 

[cutz]

How is placing multiple orders at a single price any different to placing one big order at the same price? I dont see how either one would prevent shifts in the price...

Very easy to do, one example I can think of from today is MQG even a sell order of a couple of thousand can take out several levels creating a red bar and minor disturbances with a cascading affect, imagine an order of 100000 units in one hit. (Excuse my noob terminology)

 

[jono1887]

How do i see the individual volumes at the same price on Comsec??

 

[cutz]

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