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Xinyuan Real Estate Co., Ltd. Message Board

  • hmmm26 hmmm26 Oct 19, 2012 7:12 PM Flag

    When an Institution Increases a Holding, How Do They Do It?

    Today's volume was a massive spike: 1.25M vs a 3 month ave of about 350k. The price action tells us the volume was all buy side.

    One explanation for that data could be that an Institution (or two?) initiated or expanded its XIN holdings today.

    If that were the case, does anyone know how Institutions structure their purchases of a company when they expand their holdings?

    What I mean is, given XIN as the context, would an Institution generally make one or two really big buys, or might they divide those buys up into lots of smaller buys, broken up over a trading day?

    I have no idea, so if anyone knows anything about this question, please post. Thanks in advance for your help.

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    • I do not know for sure but if I was making the decision I would balance transaction cost savings against the basis lose in a price up tick. With that in mind the best buy is purchasing in large lots. However, they are subject to the same supply and demand as everyone else. The demand might exceed the supply requiring smaller lots over longer time. Anyway that would just be the way I would approach the problem. I often bring the wrong logic to a problem.

      I am curious. Why do you think this is an institutional move rather than the normal run up between a declared dividend and an ex-dividend date?

      • 2 Replies to caseysxyz
      • @casey, it hasn't been my experience that you often bring the wrong logic to a problem. Instead, I see a guy with excellent reasoning skills who combines the attractive trait of modesty with his intelligence (plus a sly wit).

        Heh, well, before this starts sounding too much like a dating post, I'll add that on the potential runup before the Ex Dividend Date, that's a good idea as a potential cause, but during the last two quarters I've been watching carefully for any kind of price trading pattern around the divy dates with an eye towards trading them, but I haven't seen price moves of more than a few cents, certainly nothing like .28.

      • VOLUME

    • The buy gets done in whatever number parts it takes to fill it. If a buy order for a million shares is put in and only 200,000 shares are available to sell then a partial fill is made. When more shares become available then the more of the order is filled.

      • 1 Reply to walrathcrai
      • Interesting. I see what you're saying: If Institution X puts in a large limit buy order for 500k at, say, $3, then we might expect to see a trading pattern with a "floor," where the price maybe bounces around some above that floor, but whenever it trades down to the limit price, the seller buys a piece of the Institution's 500k bid, so it can't sink below that "floor" until after the entire 500k order's filled.

        Good work, Walt. I've never thought of that before. Looking at today's 1 day chart, where might we guess at its floors?

        Maybe between about noon and 1pm, around $2.95 for one? Any others?

    • Wells Fargo bought 1 share in the first half of the year.

      Invesco bought 51,137 shares.

      CALPERS bought 39,200 shares.

      I would presume 2 of the above bought in numerous buys...perhaps over a number of days. I am sure WF bought all at once. LOL!

 
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