UK Stockmarket 2009 and beyond

tradetime

cloud_dog wrote: »

Its not that they don't allow, its just that they have a min / max size for online trades and for this one the market must be short of shares.

You cna then ring them up and place an order. I've had to do it a few times previously but its not something I really want to be messing around with.

Crazy, I never cease to be amazed by how backwards our brokers appear to be, considering we are supposed to be a financial capital of the world. It seems they set the standard low and continually fail to achieve it.

turbobob

Its not that liquid but the the NMS is 5,000 so I wouldn't have thought there would be problems dealing in that sort of amount. Spread nearly 5% though which is always a disadvantage with the smaller co's.

tradetime

NMS ?? am sure I should know, but my brain has locked on that one

I agree it is a very thinly traded stock, when I traded individual stocks I would never trade a stock on a daytrade or swing trade, with less than 500,000 per day average, but even that is deceptive because I would never daytrade a stock under $10.

I can understand what they are probably doing, they have a filter that doesn't allow you to place large orders on stocks under s certain average daily volume, but I'm not sure I see the point, since they have no idea how much stock is available at the ask.

turbobob

Normal Market Size - market makers are obliged to offer firm quotes for this amount of shares - http://www.incademy.com/courses/How-shares-are-traded/The-role-of-brokers/8/1077/10002

Actually the quotes now show "EMS" where it used to be "NMS" (I'm not sure what EMS stands for to be honest) but I'm assuming its along the same lines.

According to what I'm looking at, at the ask price that share currently has 15,000 available, but that is just LSE.

tradetime

Ah ok, gotcha, knew I'd heard it before, I know it as Exchange Market Size.
I think you may mis-understand that, as I understand it MM's are restricted to offering quotes up to this size. It's designed to limit their ability to drive prices.

tradetime

According to what I'm looking at, at the ask price that share currently has 15,000 available, but that is just LSE.

Yeah, and that's what your broker sees no doubt, but that's only £3,750 ish.( it's actually quite a large number of shares to be showing in such a thinly traded stock assuming that's one ask). Like you, your broker can only see what a seller shows. If I'm trying to off load 100,000 shares of a stock that thin, I'm sure not going to show all my order to the market, I'm going to show an ask that blends in with all the others..

turbobob

Yes I'm sure you are right. Some bedtime reading on the subject - http://www.londonstockexchange.com/traders-and-brokers/products-services/trading-services/guide-to-tradelect.doc

tradetime

Two order types to pay most attention to if playing with thin stocks are Discretionary orders and Reserve orders (aka Iceberg orders I see it covers the Icebergs.
Discretionary is just a limit order with more than one price.

bobbyj_2

STY Marketmakers must have limited stock as some 50000 sells went in today yet they weren't replicating this size for online buyers. Buy the dips is the best advice on occasions like this.

bobbyj_2

Found a very interesting stock via fool board, CAO is the ticker and this research is well worth a read. Had a look and seems share is liquid and available in good size, quite how this one has slipped past me I'll never know but this looks huge value. I'll feed these into my monitor tomorrow and see how they are shaping on level 2.

http://www.fool.co.uk/news/investing/company-comment/2010/04/14/an-inexplicably-cheap-cash-rich-small-cap.aspx

I think this could be worth minimum 20p once value investors chase it up.