Makin - This 400 share trade has been the final trade on almost every day for quite some time. What it means, I don't know. I have been of the belief for a long time that in our present state the MM/Specialist for KRY has been excercising his right to trade his own shares to maintain liquidity and stability. For whatever reason he has wanted to keep a stable price at .25. I maintain as well that this has been to our benefit.

I have watched the final action most days and have seen the same thing. Often there appears to be substantial volume on the ask yet the final bid is 400 shares at a price above this. There have been lots of theories, but I don't know the reality. I do know that it is highly unlikely someone has a real trade of 400 shares above the ask every day. In the final seconds of many stocks we often see both the bid and ask pulled and the closing trade is often higher or lower depending on what is left on the table. With KRY it has almost always been a bump higher. When we were in the $3's and I was trading I made decent money buying at 3:30 PM and immediately issueing a market sell on close order.

This trend of 400 shares at close was broken the last few days when we broke .24 and dropped down to .20. (AMEX references). In those few days the closing trades were not the 400 share trades. As we started back up it returned. The other day after a previous close of .21 we were trading at this level and then the ask was pulled to .22& change and we closed at .23. The next day we traded below .23 all day and then the final trade was 400 shares at .24 with shares below this on the ask. Today was similar though we did make some spurts above .24. At the close there were several thousand shares on the ask at .2439 yet the final close was 400 shares at .25.

What we must remember is that the final minutes are often volitale as traders want in/out. We don't know the ECN order book nor do we know how many trades were "all or none" trades. This can allow a trade to go off higher than the ask or lower than the bid because they have to match the trade exactly. In this respect a MM could put a 10,000 share sell at .2439 as an all or nothing. Another trade (even by the MM) of 400 shares all or nothing at .25 (most traders can only trade two decimals) could not be fulfilled at .2439 and would move to the next level up to .25.

Sorry for the long answer. I hope it's not too confusing. The bottom line is I din't think these final trades of 400 shares above the ask are illegal. I think they may be manipulative but I don't think it is nefarious and in fact it has helped us. I don't believe there is a manipulative effort to keep the price down but rather one to hold it up.

The bottom line for me is that I welcome these EOD bumps. Since few traders/investors watch the minute by minute action all they see is the close. This sets the bar for the start of the next day. My advice is take it as a gift. Without it in our current state, I think we would drift much much lower, which may be what the MM wants to prevent.