The recent rash of oddlot trades on psa(and fmg, kcn and others) may be the use of trading systems designed to deliver better than VWAP for institutional and hedge fund traders. VWAP is used to price derivatives, convertibles and buybacks etc. It is assumed to be used in high liquidity stocks and is all the time in program tading. Has some evil genius applied the algorithm to low volume wide quote stocks to influence the quote not VWAP since VWAP is not applicable in normal business in these companies.My question-- would the price outcomes in the low volume stocks be the same without the oddlot presence? I think not.
PSA Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
