It's odd that we are in the midst of the biggest display conference of the year and nobody is reporting to the board. Where's farmboy this year? Given the volume I take it nothing of real interest has been disclosed.
It depends on where the stock has been. If I were a short and wanted PANL to drop I might flash a false offer, not a false bid. But since OBV lately has been positive, someone might actually want to buy a block of my offer, or cover a short, in which case I'd better pull the offer. If I were a buyer, I may also want PANL to drop so I might do the same thing - flash a false offer! However, if I were a buyer I might flash a false bid, hoping someone either a) sells into it, in which case I can leave the bid and collect the shares, or b) pull the bid and pick up shares as the price drops. Even in a thinly traded stock I see neither advantages nor disadvantages to flashing false bids/offers, nor can any inside info be gleaned from them. The only ones that really know their intentions are the flashers themselves. Case in point: the day before the recent Samsung news hit, when she was trading in the high-5s, I noticed someone periodically flashing a 35k bid. None of it was filled. Today we saw the same thing, as well as the bizarre AH action yesterday. I would not want to be short here.
Well, let me ask you this, then. What do YOU think is going on when you see a large bid or ask, always from the same MM, that keeps getting pulled before filling? I haven't seen this happen on PANL specifically, but I have seen it on other stocks.
Online trading has changed the psychology of the market. Given (and knowing) the trading history of PANL, if I were a buyer and wanted to induce selling I might flash a false bid. There are many who'd happily take a little off the table believing there's a substantial bid to support some selling. I just don't believe there's any psychology, forward or reverse, that supports the use of false bids or offers. As you've noted in the past, this ain't your daddy's stock market anymore.
The practice is referred to generally as "spoofing". Making it look like there is large interest in a stock where there isn't , in the hopes of getting other momo traders to bid higher - or even to take an offer the spoofer has placed. We jokingly call them " GTC orders "- but not for "good til cancelled' , but rather 'good til close' as in if the price comes close to that level , they cancel the order ,lol. Such orders are usually placed by daytraders and others with level III access, and via the ECN 's - ISLD BRUT ARCA etc - because they are very easily and quickly cancelled. I 've never used ETRD so I don't know how quickly a cancel would represent , but it's a dangerous game to play via a regular online broker . I don't think it is the case here , but I haven't watched all day , and it matters little I guess in terms of the prospects for the stock beyond the next few hours or next few trades imo. Who cares I say ? :-)
If you were looking to take some off the table, you would likely be selling regardless. OTOH, the average trader/investor is driven alternately by greed and fear, and perhaps would think, 'Oh, someone is willing to put on a large position in this stock at this high price on the belief price will go higher, so maybe he knows something I don't. His order will soak up a lot of the available shares for sale, so I should probably hold and take advantage of the shortage that will move the price higher.'
Regardless of the psychology behind the maneuver, what constitutes a false or fake bid or ask is one that is pulled over and over again before it is filled. If one MM shows up constantly below the bid or above the ask with a large order that keeps getting pulled just before it fills, one can assume there is an ulterior motive involved.
If, OTOH, an MM shows up constantly at the bid almost immediately after his last order has filled, that can means an "iceberg" order is being filled (a large order that the MM will break up into smaller increments so as not to alert sellers of the true size of the order because then they would raise their ask). One can learn a lot about the action by reading the tape.
Doesn't mean either of the above scenarios is what is happening here. I don't know. I haven't been paying much attention to PANL's trading today.
It is most definitely happening here. Check the time and sales data to see the size of order fill at 9.54 and 9.55. Anyone see 30,000 plus shares filled?? Of course not, the fake bids were pulled. Anyone watching level 2 would have seen it.
And now we're green. Let's say I'm sitting on 10k shares I bought at 8, the stock is trading at 9.50, and I notice a bid for 10k a level below the current inside bid. If I were indeed looking to take some off the table I'd be induced to SELL rather than BUY. Conversely, those looking to add or enter a new position might be induced to BUY rather than SHORT. So these claims of "fake" (I prefer "false") bids are unsubstantiated, as well are the effects.