Stocks & Commodities V. 22:4 (76): Q&A by Don Bright
Product Description
Stocks & Commodities V. 22:4 (76): Q&A by Don Bright
SPECIALIST PARTICIPATION
Q: Would you tell me what prints on the time and sales would indicate specialist participation in a stock? I’ve read and observed that double prints on the offer often reveal that the specialist is going long the stock in the same amounts that other market participants are buying the stock. What do double prints on the bid mean? Is this the specialist going short in the same manner? Also, where can I research when and how a specialist is governed in entering and exiting positions? Thanks — grimer11
A: You can tell exactly when a specialist is participating in certain prints, and when he is likely to have participated in others. Here’s an example: When you see the bid or offer change significantly, without the other side changing at all, and then a block trade (print) goes up at or near the recently changed quote price, you can be pretty sure that the specialist took part in a negotiated trade. This activity indicates that the quote price must be changed so that the trade price falls within the (new) national best bid/offer (NBBO) as required by regulations. These block trades are always 10,000 shares or more in the stocks that I trade.
SPECIALIST PARTICIPATION
Q: Would you tell me what prints on the time and sales would indicate specialist participation in a stock? I’ve read and observed that double prints on the offer often reveal that the specialist is going long the stock in the same amounts that other market participants are buying the stock. What do double prints on the bid mean? Is this the specialist going short in the same manner? Also, where can I research when and how a specialist is governed in entering and exiting positions? Thanks — grimer11
A: You can tell exactly when a specialist is participating in certain prints, and when he is likely to have participated in others. Here’s an example: When you see the bid or offer change significantly, without the other side changing at all, and then a block trade (print) goes up at or near the recently changed quote price, you can be pretty sure that the specialist took part in a negotiated trade. This activity indicates that the quote price must be changed so that the trade price falls within the (new) national best bid/offer (NBBO) as required by regulations. These block trades are always 10,000 shares or more in the stocks that I trade.
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