Hi Dealing,We have a bit of a dodgy dealing system here in the...

Hi Dealing,

We have a bit of a dodgy dealing system here in the UK. (In fact there is very little in the UK that isn’t dodgy nowadays). When I refer to a ‘buy’, I mean that someone has taken stock from one of our market makers. The computerised trade recording system used by the LSE never states whether a trade is a buy or a sell as there always has to be two parties involved. It merely records all trades.

Other systems that take trade information from the LSE system make a stab at estimating whether a trade is a buy or a sell based on the price of a trade compared to the dealing quote at the time. If the trade is below the quoted dealing mid-point when it is reported then it gets shown as a ‘sell’. If above mid-point then it becomes a ‘buy’.

One problem we have in the UK is with large deals like the 3.9 million. Large deals are allowed to be reported late (days late in some cases though usually only an hour or three) and that happened with the 3.9 million. By the time it was reported, it had already impacted on the quoted price range and had moved that range higher. This in turn causes the trade to be incorrectly reported as the actual trade price now falls below the quoted mid-point. So when reported it gets marked as a ‘sell’ even though it wasn’t. The very trade that moved the price higher thus gets shown incorrectly.

Hope that explanation helps.

Rheochem continues to be sought after today and the current quoted price is 7.5p to sell and 8p to buy.

Regards,
LR2.