Re: After Hours - very interesting!/fastfoo...
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Message: After Hours - very interesting!
Fastfoot...not trying to contradict you, just clarifying my take on this issue since others ask.
Yes, for every buy(er) there is a sell(er) and by definition, vise versa. But both sides of the trade are not necessarily investors like you and me.
Since market makers run the show, often times, if not always, they, the market makers, are actually the buyer or the seller. Sometimes they are both!
Usually when a large trade occurs at below the current bid, it is due to a normal investor like you or me having put in a sell order with the market maker only paying that investor a sub-bid price for that trade.
When an investor wants to buy a large block, the MM will usually demand a premium at a price above the current ask.
Sooner or later, you will see large blocks trade ABOVE the current ask, in fact, we saw a few of those at just prior to or just after the open, this week.
Why is this issue confusing? Look at the definitions of bid and ask:
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| This is the quoted ask, or the lowest price an investor will accept to sell a stock. Practically speaking, this is the quoted offer at which an investor can buy shares of stock; also called the offer price. | |||
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Bottom line, I almost always have paid the ask price when buying shares and have received the bid price when selling. So almost always when a trade occurs below the bid, someone has sold. |
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