Large Buy well above inside Ask

[TheBramble]

Wasn't too sure which forum this one should go on, but it's more a US Stock than LII issue (I think)...

I was watching IMCL (ImClone) for quite a while today

At about 15:30 (EST) while it was trading @ 80.15/19 in normal sizes (10-100), suddenly a Buy came in of 1600 @ 80.25.

Why would anyone buy that size at 6c above the inside Ask?

 

[jimvt]

Fat fingers?

 

[oatman]

If you want the size you must bid higher than the ask to fill.

 

[Sirlosealot]

Tony

I've noticed occasional odd deals like this in other stocks. Sometimes this causes a huge price spike in the 5 min chart. I wondered if it could be because of late reporting. If my Money.net feed is correct IMCL was trading at around this price (80.25) at 15:27 (ie only 3 minutes earlier). I know NASDAQ is supposed to be all electronic and instantaneous but I still wonder if there is a way of delaying the reporting of large deals just to throw those of us trying to get to grips with price/volume techniques off the scent!!

Does anybody know if this happens?

Gerard

 

[TheBramble]

If you want the size you must bid higher than the ask to fill.

Why not just go at market? At least you'd get the first few hundred off at the inside before taking the price up a few cents.

To go in a +6c seems a lot. How do they (I assume it's big money) work out what Bid will get a total fill at a single price? And why would they bother? Why not just drip feed at the inside until filled?

It's nothing to do with VWAP either as IMCL was trading right up toward the higher VWAP at the time in a tight 80.00-80.50 channel.

Puzzling...

 

[TheBramble]

I've noticed occasional odd deals like this in other stocks. Sometimes this causes a huge price spike in the 5 min chart. I wondered if it could be because of late reporting.

Gerard, in this case there was no volume or price spike. The 80.25 trade was recorded quite normally and (as stated above) as it was in a 80.00-80.50 channel wasn't an anomaly in that respect.

Plus the volume was pretty subdued generally and the 1600 during that 5min period didn't produce a significantly different volume bar.

 

[TWI]

If it is a broker executing a market order he will likely just take out at price that will get him all the volume basis what he sees in the depth. Most depth trading systems will show price required to lift accumulative volume. Could it have been a buy Stop?

 

[TheBramble]

If it is a broker executing a market order he will likely just take out at price that will get him all the volume basis what he sees in the depth. Most depth trading systems will show price required to lift accumulative volume.

Good point! I wasn't looking at the depth at that stage.

Obviously they thought it was all cheap enough at that price and I'm guessing there was only 100 max at the inside.

I'll look forward to the day when I need to consider this aspect on my own trades!

 

[triplepack]

Hi Tony,

Which exchange was it transacted on ? It could have been on Instinet or Archipelago going through CINN or PACX.
Amex gives some crazy prices , I dont know what is happening on Amex when this happens but it would be interesting if anybody here knows.
Maybe at that time Their market Depth on the asked had gone several levels higher for a short period of time and someone hit it.

Triplepack