Accumulation 101

There were a number of things that occured today that I thought I would elaborate more on, in particular for investors who have not seen this type of trading before:

Cross trades

I recall twice today where things were setup perfectly for an assault on a new daily high then we saw a massive buy side line wipe, from memory both times were around 5 million shares each.

You will note that on both these occasions a good portion of the trades were 'cross trades' which are trades where the same broker is party to both sides of the transaction.

You could think of these trades as simply an internal transfer of the broker that is facilitated on market.

Why am I explaining this? Well it's simple - by wiping a line like this it induces others to sell allowing the broker to accumulate more shares at a lower price.

Bid pulling

I noticed this before the last hour of trading where they would place massive orders at 5.1 / 5.2 then commenced purchasing shares at 5.3 mainly.

Then in a blink of an eye they pulled these massive bids (one was for 4 million) then wiped a 5.2 line.

All of a sudden the price went from steady buying with 5.3 on the bid to all these buy orders disappearing and now 5.2 on the ask.

Once again a typical accumulation move - causing traders / investors to think that those bids were only there to pump the price up when in fact they were used as tools to aid accumulation. You will find that the buyers would have not minded one bit if their orders were executed.

After market auction

Finally in the after market auction they had a bot running to ensure that the price finished at 5 cents - and as most have noticed this was achieved by a single share sale at the end.

But the buyers at 5.1 and 5.2 did not stop which meant that they had to offload a much larger amount of shares to allow the price to finish there (from a glance it was over 6 million but someone can confirm).

Hopefully I've helped some understand some tricks that they use which in the end  have one purpose - accumulation.

By not selling to them they will have no choice but to accumulate at a higher price.