Monday, August 13, 2007

Freaky Hybrid Trade Of The Day! LNN!

I mean, yeah, the open is always more volatile, but this shit ain't right!

The stock opened at $44.86 on a 1500 share print. Next trade? 100 shares, over a point higher up at $45.95. So, yes, you're reading that correctly. A big buyer moved in with 100 shares and moved the stock over a point.


In the next 10 minutes, the stock traded a little over 6000 shares and dropped 3 points. Most of these trades were for 100 shares each. In other words, the stock freefalled on no trade volume.

Further, after the stock bottomed out at $42.85, it took only 1000 shares to jolt it back up to $44.48. In fact, that analysis is generous. It took 900 shares to move the stock from $42.85 to $43.55 (absurd in itself) and then 100 shares to move the stock from $43.55 to $44.48 (completely freaky).

So another full point on a 100 share trade.

Gaps in liquidity anyone?

Please, visit Ray's blog and let your voice be heard. If you're an old NYSE trader his site may be the only good outlet for you to voice criticism about the Hybrid and have any hope it's being heard.


Bluedog said...

Are you sure it's the product of the hybrid market versus a stock with very very low volume which makes is susceptible to wide price fluctuations?


Dinosaur Trader said...


Absolutely. "Thin" or low volume stocks have always been my niche. They've always been more susceptible to price gaps and illiquidity, but not to the extent that we see with the Hybrid.

In the past, you'd have much more volume associated with a point move in a stock, even a very thin one, unless it was a very expensive name.

But a $44 stock should not be moving a point on 100 shares... especially one who trades a few hundred thousand shares a day. That's not overly "thin" in my book.


Jared said...


Have really enjoyed your blog. I had a few questions for you if you could send me an email when you get a chance.

Thank you!


Dinosaur Trader said...


The answers to your questions are:

1. Yes
2. Yes
3. No
4. That's fucked up. No.
5. I'm a Jedi.

Thanks, DT

Bluedog said...

Thanks for your reply, DT. I'm also curious where you surf. Shoot me an email at Did you buy your new longboard with green dollar signs as a reward from last week yet? :)