I think there's games being played across the board in the commodity landscape from brokers, DRE raised @ 10c & 6c and here we are at 1.5c it would seem everyone is well under water from those levels? along with other factors e.g. cyclical pricing etc. Mind you Gold etc. are running ATHs and were starting to see other commodities recover.
I read an interesting post the other day i thought i would share it, I'm not saying it applies here, but it does make you wonder.
Brokers and institutional traders can try to mitigate or “recoup” losses on a stock position by using trading bots to influence the stock price, though this requires a high level of sophistication and is generally complex due to market regulations and scrutiny. Here’s a high-level look at some of the tactics they might use:1. Algorithmic Selling Pressure • Goal: Temporarily push the stock price lower to buy back shares at a discount. • How It Works: By using bots to initiate a series of small sell orders over time, they create the impression of increased selling pressure. This can cause other traders (especially those with automated trading algorithms) to follow suit, further driving down the price. Once the price reaches a certain lower level, the broker or institution might step in to buy back shares at a discount, potentially offsetting prior losses.2. Ping Orders and Layering • Goal: Test market depth and induce other market participants to react. • How It Works: Bots can place a series of tiny orders at slightly lower prices to test liquidity, sometimes called “pinging.” When they detect weak support at those levels, they might increase the volume of sell orders to nudge the stock downward. Bots can also use “layering,” where they place fake buy/sell orders at multiple levels to create artificial demand or supply, creating an illusion of market direction that influences other traders’ decisions.3. Market Making with Rebate Capture • Goal: Collect small profits through high-frequency trades and rebates. • How It Works: In highly liquid markets, brokers sometimes act as market makers, simultaneously placing buy and sell orders and capturing the difference in the bid-ask spread. They may also earn exchange rebates on these trades. Although this approach doesn’t push the price down directly, it can help them gradually cover losses if the stock is stable enough to allow continuous small trades.4. Short Selling Strategies • Goal: Further depress the stock price to repurchase shares more affordably. • How It Works: If the broker has reason to believe the stock’s fundamentals are weak or the price is inflated, they might engage in short selling to push the price down. By borrowing shares to sell at the current price, they can amplify downward pressure. Once the stock price falls, they repurchase shares to cover the short position at a lower price, offsetting the initial long position loss.5. Spoofing (Illegal Practice) • Goal: Manipulate price by creating false impressions of market sentiment. • How It Works: Spoofing involves placing large orders with no intention of executing them, only to cancel them once the desired price impact is achieved. For example, a broker might place a large sell order to scare other investors into selling, then cancel it when the price falls and buy at a discount. This tactic is illegal in most markets but has been used historically in attempts to manipulate stock prices. Risks and Regulations It’s worth noting that market manipulation is heavily regulated, especially tactics like spoofing and layering. The SEC, FINRA, and other regulatory bodies monitor trading patterns, and brokers found guilty of manipulative practices can face severe penalties. In summary, while brokers might use algorithmic trading to influence prices, most legal methods involve sophisticated techniques that align with market depth and order book strategies rather than direct price manipulation.
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