why such litte trades?, page-2

greggaway,

absolutely it's bots, which means institutions, but the logic is not always as straight forward as accumulating or selling.

I hold a few shares in ASL and FGE - mining services companies with market caps under a billion. Both are continually traded by bots - trades are typically in the hundreds or teens - trades of a single share are not uncommon.Check them out.

I gained some insight, when i noticed that ANZ was issuing company notices as it drifted between becoming a substantial share holder and ceasing to be a substantial share holder of one of these companies - i.e. hovering around the five percent mark.

Opening the announcements, hundreds of trades were listed. ANZ was both buying and selling. It was evident that some trades were between different investment arms of ANZ i.e. different mutual/super funds etc. That is, ANZ was selling shares to itself, or selling shares on the market, then buying them back almost straight away.

I think - and this is only guesswork - that some of the trades were to lock in capital gains/losses, without necessarily increasing or diluting the overall holding. So in a case like today, with a sizeable leap in share price in percentage terms, an underperforming fund could sell off a few shares and boost it's returns, with another fund picking up the slack.

That would explain a large number of trades with a negligible effect on the actual price.

But as I say - this is purely guesswork. Someone in the industry - I am not - might have a better insight.

I'd be interested to hear more myself.