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100X bid ask spread?


CRHawk
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In pre-market trading a couple of days ago, I saw CMP with a last of $75.22, a bid of $7.52 and an ask of $752.20.  Volume 0.

 

Was this traders who fat fingered their orders?  Or traders who hoped other traders would miss the decimal point and put in a market order?

 

What the heck?  Any ideas?

 

Wierd-CMP-Bid-Ask-Cropped.png.f3e3617739879670243ecb9a398e7b8d.png

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Former trader here. It's actually not that strange. A lot of stocks have extremely wide spreads pre and post market. Part of the reason is just there is no one trading it. There is also extreme uncertainty because news like buyouts come out pre/post market. If you're a trader who offers liquidity pre and post market, the chance of informed traders trading against you becomes higher. Some market makers are obligated to offer liquidity, and they just quote some ridiculous bid/ask to protect themselves.

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Related question -- sorry in advance for hijacking the thread.

 

Does anyone have any experience throwing out sucker ask prices hoping they'll get picked up? I've done it before with bids for stocks that have no liquidity with a modest amount of success. What about throwing out a sucker ask price that's 5-10% above the last ask and hoping some sucker makes a market order instead of a limit order. Has anyone ever successfully done this or am I out to lunch?

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I would think it would be a pretty big waste of time.  Most likely even if you are the best bid or offer and someone does a market order the shares probably wouldn't get to you.  The order would probably get internalized and filled at a price like 1/100th of a cent better than your quote.

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Related question -- sorry in advance for hijacking the thread.

 

Does anyone have any experience throwing out sucker ask prices hoping they'll get picked up? I've done it before with bids for stocks that have no liquidity with a modest amount of success. What about throwing out a sucker ask price that's 5-10% above the last ask and hoping some sucker makes a market order instead of a limit order. Has anyone ever successfully done this or am I out to lunch?

I think the major problem that you will have is that you will almost never get action, and once you get action there might be news that is moving the price and you could be the sucker.

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I think the major problem that you will have is that you will almost never get action, and once you get action there might be news that is moving the price and you could be the sucker.

 

This, or the trade will be cancelled (I've had 4-5 trades cancelled on stink bids / asks over the years... always the cancels were not to my benefit).

 

Ben

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I think the major problem that you will have is that you will almost never get action, and once you get action there might be news that is moving the price and you could be the sucker.

 

This, or the trade will be cancelled (I've had 4-5 trades cancelled on stink bids / asks over the years... always the cancels were not to my benefit).

 

Ben

 

Indeed, that is the main problem.

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I think the major problem that you will have is that you will almost never get action, and once you get action there might be news that is moving the price and you could be the sucker.

 

This, or the trade will be cancelled (I've had 4-5 trades cancelled on stink bids / asks over the years... always the cancels were not to my benefit).

 

Ben

Will you get cancellations when your bid/ask is just 5 or 10% away from previous close?

 

Indeed, that is the main problem.

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This, or the trade will be cancelled (I've had 4-5 trades cancelled on stink bids / asks over the years... always the cancels were not to my benefit).

 

Ben

 

Whaaaa?  How the heck does that happen?  Without some sort of penalty or recourse?

 

-Jeff

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