Thursday, March 15, 2007

TNH - The Freaky Hybrid Trade of the Day!

As promised, here's what TNH looked like and why it wins freaky hybrid trade of the day honors.

The chart, though inexcusably choppy, doesn't tell the whole story. What's important is how erratically this stock moved on such light volume.

9900 shares moved the stock down 1.5 points in 20 minutes on mostly 100 and 200 share prints. There was never an offer shown to indicate any type of selling pressure. This move was simply 100 share lots smacking 100 share bids and causing the stock to move straight down.

In addition, the quotes were updated over 600 times during this time period, or about once every 2 seconds. An overflow of information but unfortunately, none of it was useful in helping one discern what was happening in the stock or why it was moving down. Remember the art of tape reading? For decades it was a reliable tool on Wall Street, no longer. The hybrid system has killed tape reading.

Trades like this make me and many others doubt the integrity and overall feasibility of the hybrid system. And this is no anomaly. Really, there are literally hundreds of examples of trades like this. And lest you think I'm complaining because I somehow got wrecked in the stock, that's not the case. It was one of my better stocks today. I just happened to be watching it at this time and thought I'd highlight it's craziness.

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