The trading of Computer driven Bot trading will eventually wipe out small shareholders that don't understand the market.
What is a Bot: A Bot is a computer program (Algorithms) that is set with an arithmetic program that is designed to manipulate any stock they choose.
What stocks do they PICK on: They prefer stocks that they know is a good stock and that eventually it will rise and rise. What do the Bots actually do: Example. If a stock opens with a seller at say 10,000 shares at $5.00. On the buy side there is a buyer at say 5,000 shares at $4.50. The Bot puts 10,000 in a Sell in the screen at $4.51, (90c below the genuine seller to look at though the stock is going to collapse) when the market opens the Bot sells the 10,000 shares to themselves but it looks as though there has actually been a real sale of 10,000 shares at $4.51 with a buyer and a seller. The punter thinks the stock has just fallen 0.49c, but in real it hasn't dropped at all.
The Bot will then sell stock to the genuine buyer that wants 10,000 shares at $5.00 in the screen (the real buyer) and sells him stock he doesn't have (short sells). The Bot is now minus 10,000 shares. The Bot then puts a sell order on for 2,000 shares @ $4.25c and then buys it themselves. Now it looks at though the stock is dropping through the floor with 22,000 shares sold when in fact the bot has really only bought 10,000 shares, the ones he bought from the genuine seller. Now the Bot has to keep putting in stock into the sells lower than anyone else so it looks like there is all this selling coming in.
The Punter panics and thinks, I better get out of here this stock is in a free fall. Everyone starts to sell and the Bot then buys the panicers stock below his short stock position of $10,000 he has paid to a genuine seller for $5.00 and buys in back for $4.00 or less. The Bot then continues this process all day. At some times at great risk, but they just continue to punt with the program by selling the stock lower. When the Bot has sold down the stock he then has to buy it. That's when you see a buy order come on to the screen in an instant. When a genuine buyer comes into the marker the Bot add one extra cent to stop you buying. If you go one higher then he will have to go one cent higher so he can get his short position taken care of. The program allows the Bot to manipulate the stock down as far as he likes. In the case of CDU they appear to have set their downside to get the stock at around 0.30c a days. The poor old shareholder thinks, geez this stock is collapsing when in fact out of 600,000 shares being trades only 50,000 were genuine.
The Bot just buys and sells their own stock to each other. Its called Churning. The program that is used for Bot trading costs $2m and cannot be used by the Public, because if everyone had it, it would only destroy the whole ASX. So if only a couple have it they can make a fortune destroying the ASX, but very slowly and not enough to draw the crabs or regulators. The ASX administers its own Company. The ASX is a listed company just like CDU. It has shareholders just like CDU. But it is its own regulator and as such is out to make as much money as it can for its shareholders which is mainly Stockbrokers. Getting the picture Sucker.
What about the cost of all of the traders that a Bot does by selling 1 share or 2 shares a time.???
Well, believe it or not the Bots can do as many trades as they like in one day, 10,000 trades of over 5m shares if they want, guess what ... They only get charged for ONE TRADE.
Can anyone do it??? NO if a person or a shareholder or an investor did what the Bots did, you would be charged with share manipulation by the ASIC immediately. ASIC and the ASX have employees scanning the ASX trades all day enforcing compliance and looking for people who are doing what the Bots do legally. ASIC has just asked the Federal Government to increase the fines for share manipulation and insider trading to $500,000 and from 5 years to 10 years Jail. How do you jail a Bot. Its a technicality. A person switches on and off the Bot and sets its program and pinpoints its prey on a daily basis, without fear from any regulator.
IXR Price at posting:
0.8¢ Sentiment: Buy Disclosure: Held
(20min delay)