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  • mountainstkpikr mountainstkpikr Dec 3, 2007 1:25 AM Flag

    Sweden vs. U.S. trading

    Some of the messages recently on Swedish trading versus U.S. trading got me thinking.

    Hypothetically, let's say you were an institution with a global presence and the ability to trade on any exchange you wish. You have been watching EPCT for a while and have done a lot of homework. Your research leads you to believe that the chances of Ceplene approval are greater than what the market is pricing in. You are a trader, not an investor, and you plan on selling shares immediately after approval(or at a loss if rejected). Where do you buy your shares?

    It seems to me that any trader playing a Ceplene approval(or any other potentially explosive news for that matter), and with the ability to trade on either exchange, would want to buy in Sweden. The market opens many (6 or 7?) hours earlier than the US market and all news seems to be released prior to the Swedish opening, not the US. If you had a trading mentality wouldn't you want the ability to trade the stock immediately after the news is available? How many times have you seen a stock spike huge, on big news, after an open and then give back 30%+ of those gains by the end of the day? A lot of times, the highs of the day are made in the first half hour. If you were a trader, would you want to be a spectator in the U.S. watching all the action in Sweden and possibly missing the highs on the news? I don't think so. On the other side, if Ceplene were rejected, wouldn't you want the capability to blow out your position immediately and not watch the stock tank lower and lower for hours before the US market opened and you lost an additional 20-30% on your position because of the wait?

    Very long winded here, but it seems that there is a definite advantage from a trading standpoint to having your shares in Sweden, not the US. It's a unique situation and one that probably doesn't surface too often in a stock with a market cap this small.

    I'd welcome some thoughts here.

    mountain

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