Stocks & Commodities V. 23:2 (80): Q&A by Don Bright

Stocks & Commodities V. 23:2 (80): Q&A by Don Bright

SINCE YOU ASKED

Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.

TICKER

While watching the ticker on CNBC preopening, I note most trades are in the hundreds of shares. After the opening, I note the trades are predominantly in the tens of thousands per trade. Then, when I access a Level II time and sales ticker, even after opening, I note, once again, predominantly trades in the hundreds of shares with no sign of the big trades. If I am looking at Level II and see a market maker showing 100s at $20.05 (for example), what is the impact of all of those big shares that are not showing up on my trading screen? Does it have no effect at all on the bid/ask? Would that volume not move the stock price, even if no low-volume trades are currently showing up on my screen?

James Kellndorfer addressed this same question in the October issue of Technical Analysis of STOCKS & COMMODITIES, and he seems to have no answer either. In view of the facts shown in Kellndorfer’s article pertaining to the increase in program trading with a simultaneous decrease in small trading activity, has this caused your traders to seek faster trades while accepting smaller gains in order to remain in the trading business?

Thanks — Ponsinir

There are simple answers to your questions. Before the opening bell, you may see some trading in the premarket hours. Big players don’t bother much with pre- or post-market hours trading. . .