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Xinyuan Real Estate Co., Ltd. Message Board

  • lizhang200 lizhang200 Dec 8, 2012 7:40 AM Flag

    Recent Trading Patterns

    Even with the disruption due to the recent SEC news, the graphs for the last two weeks or so clearly indicate one or more large institutions are very actively buying and selling XIN and aggressively managing the price as they do so. Is there anyone on this board who is familiar with these sorts of trading patterns and the algorithms used by institutions who can break down these patterns and explain to me (while making reference to various aspects of the graphs) how many institutions are likely involved and what their likely objectives are?

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    • recently on a penny stock with big swings and multiple market makers -- I tried a few experiements -- which resulted in suggesting a "cover the retail stockholder" strategy was the simplest explanation.... Quick change in market maker bid and ask, if etrade or ameritrade were the market makers with a bid or ask.

      On further reading, I found a concept called "momentum ignitor" as a strategy.... The idea is to create more volatility. It works by using trades to move momentum in a direction - offering more shares as the price is falling, to draw shares from others in the market with a result of increasing supply, which further drops price (supply / demand curve moves more supply, so price lowers), which further increases the supply and so on. The reverse can happen as well. When the stock loses volatility, the igniter strategy can add volatility when it is not expected. The high frequency trading takes advantage of the increased volatility more efficiently than non- computerized trading - as it can respond much faster.

      The algorithms depend on ultimately balancing the trading (accumlating and releasing shares) -- so can drive stocks up and down with little overall movement by the end of the day or the end of a week, but with increased volatility and many more shares traded -- with movement of the stock uncoupled from value of the stock as the major influencer.

      For XIN -- the 3.20 range has been a tipping point between the 3.10's and the 3.30s --- yesterday, a tip moved quickly to the 3.30s -- whether momentum ignition or not is hard to prove.

      Hope that adds some utility to the discussion..

    • Do yourself a favor pal. Buy slowly on weakness and sell slowly on strength. Forget the rest of the stuff. It's garbage.

      Sentiment: Hold

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