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Robotic "manipulation"?, page-3

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cellofrog

328 Posts.

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26/02/18

20:33

Post #: 31359529
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Originally posted by Fact Finder ↑

Hi Cellofrog

As luck would have it a close relative who is visiting from O.S. was around when I read your post so can offer you some information from a person who works overseas in the regulatory area:

As to point 1.

The ASX does not set the trading terms for low level investors like you and me. In my case how I am allowed to trade is determined by Commsec based on no doubt what they want to make by way of commission. Do they give me a fair deal I do not know.

Broker driven dealings whether by Bot or not will be on the basis of special arrangements regarding trading terms negotiated directly with the ASX and because of the huge volumes brokers control they will have negotiated fee structures that are more favourable than available to your or I even if only trading one share.

Even on Commsec if you want to pay more and can fit a definition created by Commsec of a sophisticated investor you can access different trading terms than we low level investors. Being old I still remember the days before Commsec (and others) when the only way in which you could trade shares at my level was through a broker and under that system the fees were prohibitive for most ordinary people.

As to point 2.

The answer to this question is beyond us all as Bot trading is a result of algorithms and each algorithm will employ a different methodology. It is possible that an algorithm could be set to drive down or up the price of a share at closing but it would be very difficult unless a particular share had very low volumes for such to do much more than influence the price by much more than half a cent without it becoming very obvious.

Where a company like Merk is concerned given how large it is, the amount of money which such a strategy could save it when compared with the risk, it would be highly unlikely that it would be involved or even need to be involved. Forty or fifty million either way is nothing in the world in which it exists.

This leaves you looking to some third party who had an interest in driving down the price independent of Merk or VLA. Possible but who and to what end.

Just a thought on why the price dropped back after Lepu despite some good information. Reading the blogs and articles following the Lepu investment there was certainly a lot of suspicion and concern about what this might mean for VLA's chances of being the subject of a takeover bid in the short term and what were Lepu's motives.

Added to this McColl was extolling the value to VLA of the $60 million cash in hand and how it could go ahead with all these extra trials etc; and at least in my mind seemed to be creating an environment where any thoughts of a takeover as a result were being pushed out at least until 2019 or beyond.

This negative sentiment was also on the face of it fuelled by the fact of Cormorant selling out its holding being announced to the market at the same time.

If this thought has any merit then part at least of the pull back may have been due to overall negative sentiment around these issues. Not saying this is a fact and would be happy to hear all arguments as to why the drop was not partly due to these occurrences.

As to point 3.

It is without doubt an offence to deliberately manipulate the market.

As to point 4.

Your question is based upon a false premise. The ASX does investigate market manipulation as does ASIC. If any person has evidence of market manipulation they should report it.

My personal take on the present situation is that being a small fish in a very dangerous ocean I am happy when my interests coalesce with those of the predators and I make a profit. At times like these even if I am not making as much as I fantasised I remind myself of the old saying "You can't go broke putting money in your pocket.".

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Hello Fact Finder,
Thank you for the trouble you have taken in answering. Much of what you say, I had pretty much guessed~ apart from the bit about my/our not being allowed to make trades less than $500.That is interesting, and seems anti-intuitive....but I am sure you are correct.

As to the effect of multiple robot trades, I imagine lots of nervous nellies (such as I, when I started out) can be spooked into selling, before a true trend has appeared, so creating a stampede..........but, I agree it would be near impossible to prove, if that is how it works.

In any case, it is as you say: the small fish can still get a feed! I'll make a nice profit for a year's hold, so why should I carp? But~ money aside (is such a sentiment even allowed on HC?)~ it's easy to get twisted out of shape by unfair dealings.....or the appearance of such!

Cheers,
Pat

VLA Price at posting: $1.69 Sentiment: Hold Disclosure: Held
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