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Exelixis, Inc. Message Board

  • eurotyle eurotyle Feb 10, 2012 11:04 AM Flag

    This is what Goldman will do

    This is purely my opinion.

    As everyone may or may not be aware, Goldman has to pay somewhere between 24-32 (various per stock) cents per every 100/share lot sold back to the the NASD, this is how the NASD makes their money.

    Depending how the stock performs (if it trends higher), Goldman will slowly sell to retail buyers over the course of a week, month, etc. Goldman will then make the trade commission minus the 24-32 cents/per 100 shares.

    Let's assume the stock is up and Goldman sells all their shares in 1000/share allotments...

    Goldman just sold in the green, made commission on 1000 trades (assuming 1000/shares per trade lots) minus their costs to NASD of 24-32 cents per month.

    Not only did Goldman make money since the stock was north of $5.50, they also made commission on 1000 trades. They doubled up the gains.

    Goldman is quickly becoming a high-frequency trading firm and this is precisely how the HF traders make a trade.

    HF traders love a 1 cent movement simply because with 1,000,000 shares, a one penny movement to the upside can make them $110,000, mostly from individual trade commissions, not the actual 1 cent gain. The penny gain only makes them $10,000, but the commissions make them $100,000.

    Rinse, wash and repeat several times a day with EXTREME volume stocks such as Bank of America and you make a killing each and every day.

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