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FraserJC

4,274 Posts.

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07/08/19

13:08

Post #: 39901632
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Originally posted by Caveat Venditor: ↑

this is a fallacy.

Brokers (trading on behalf of instos) can trade in far smaller parcels than retail as they batch and settle their days trades in aggregate, where retail investors trade in single lines.

Many brokers will be trading with larger volume (either buying or selling) over a period of time (sometimes weeks). Agreed they do use algo's to do this automatically (referred to as bots) but it isnt done with the "evil intention" people carry on about.

They trade in the manner which is defined by their client. For example a client may tell them to participate in 5% of the volume traded, so for every 1000 shares traded they will trade 5 shares. This means that to "keep up" they need to participate using smaller volumes to ensure that their price is as close to VWAP as possible. If an institution is trying to buy $10m of ISX, then it is not practical for them to buy it all at once as the price would skyrocket and then plummet.

This whole conspiracy theory around price manipulation by instos that goes on in every small cap stock forum is paranoia 99 times out of 100.

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Are you sure about that?

Even this very simple article on nasdaq.com clearly states that market manipulation is rife, and usually done by instos. Do you have a source for your comments? Not looking for an argument, I'm just genuinely interested.

https://www.nasdaq.com/article/5-market-manipulation-tactics-and-how-to-avoid-them-cm946807

ISX Price at posting: 84.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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