Hi, normally I like to sit and giggle (laugh at the market) when some things happen
on this occasion I am firmly sitting on my hands, so I thought Id post some math instead.
First we start with the questions.
Why is there depth in a market? Who the hell benefits from having an offer in say 5-10c above/below the current price? (Look at the last months trading) I mean that kind of trade never actually happens, so whats it there for?
Now look back as far as about Feb, There is a big volume spike of about 3M, accompanying a price drop.
What happened?
Somebody, (probably just one as its statistically unlikely for lots of individuals to all decide No! I must panic sell, all at the same time for no particular reason. (please note i cant remember if that time there was reason or not, but I have see largish volume trades in TIS and spikes with no market info (aka no fundamental reason))
Anyway the point is, from time to time, somebody owns (or wants to and buys) a biggish slab of stock and says "Damn I want out or I want in and decides to do that in a hurry. Perhaps a million tissue shares is small potatoes and they need cash for something else? Perhaps they want to test resistance points. Whatever I don't care, sometimes some people dump significant parcels "at market"
If at that time you happen to have a trade hanging around, then on just this occasion your trade goes off. So if you had had 100k at 0.30 when the prevailing price was 0.35, the trade goes off in the 3M spike (the highly likely rebound happens) and then you buy them back at 5K profit. Note if your holding was so large that 100k more or less didn't radically alter the size of your holding, then whether you own 1.1M or 1.2M shares is not something you care all that much about. But milking the possibility of those spike buys makes money of the income variety.
Ok so why no depth today?
Well if news somehow appears real soon now and we expect it real soon now, then the price may spike STEP one way _or_ the other and not rebound.
I expect not to see so many positions held wide of the current trading range.
There will still be some people who have set their exit point on good news at X, they may have their positions dialed in. (offer)
If there are any people, confident rejection wont happen (this month) but delay might, then they may put in buy offers to try and capitalise on any flush of rash disappointment selling.
But IMO, basically for fundamental investor types, its hands off stand back and watch which way the pending price sensitive info rerating drives the price.
Personally Im going down the bottle shop later today before there is a run on the good stuff.
Worst case is if its bad news I can drown my sorrows in the good stuff.
My 2c, DYOR, DYO math too.
Also note: I believe the skill at putting in the offers wide of the trading range and making money as opposed to just getting caught, by large price steps, (not spikes) is rather a lot trickier than I just described so I suggest, you dont read what I just wrote and try it.(that is insufficient info) reading what I just wrote lets you share the "weeee here we go again" that i feel when those spikes happen while I sit on my hands and giggle.
develop a realistic short term sales based expectation of EPS, and they WILL come.
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