Day Trading stocks with Infinite Funds, controlling the market

N

nugundam

Hi, just wondering if everyone agrees with me that if one had $1billion to day trade they would be profitable EVERYDAY as they would control the market in a particular stock with a given market cap (I would look for stocks that had the right amount of volume and volatility, obviously $1 billion won't move the market the same way in GOOG as it would in say JDSU). Specifically, i was thinking of SUNW and ORCL as examples.

I suppose what I'm trying to get at is if someone posts an invisible bid or offer at a certain price level for say 100 million shares to place a cap what would happen? I say this because I see lots of refreshers in various stocks and it bothers me that these people are in effect manipulating the markets. Day traders don't know if the bid/offer is for 1million or 100 million shares. The way I see it the bigger fish always wins, ie the guy with larger pockets.
 
Quote from nugundam:

Hi, just wondering if everyone agrees with me that if one had $1billion to day trade they would be profitable EVERYDAY as they would control the market in a particular stock with a given market cap (I would look for stocks that had the right amount of volume and volatility, obviously $1 billion won't move the market the same way in GOOG as it would in say JDSU). Specifically, i was thinking of SUNW and ORCL as examples.

I suppose what I'm trying to get at is if someone posts an invisible bid or offer at a certain price level for say 100 million shares to place a cap what would happen? I say this because I see lots of refreshers in various stocks and it bothers me that these people are in effect manipulating the markets. Day traders don't know if the bid/offer is for 1million or 100 million shares. The way I see it the bigger fish always wins, ie the guy with larger pockets.
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To an extent I agree. But here is where I would argue differently. I believe the big money does accumulate the positions in a much more subtle manner than in prior years. When their position is near completion, then they employ the above tactic. But I do not believe that this is simply something that is done intra-day for no other purpose than to simply game the intra-day time frames. It is implemented for a much more macro purpose, to dampen volatility, to encourage other speculators to join in on the bid and to systematically squeeze shorts out of the markets.

The big problem occurs on those pesky gaps, downgrades, and other unforeseen events. So I doubt the strategy would be employed for too long a period of time or without a big enough buffer in their average cost not to make it more than worthwhile.

Senor Zen
 
little off topic, but i think there it is myth that some sort of institutional consortium decided to move positions in a more subtle manner via smaller orders to create lower volatility. my theory is that compared to previous years, there just aren't as many situations where they are forced to unload or cover. this current bull market is different from the last where people were desperate to buy stock. and people were panicking to sell in the last bear market. i believe the lack of volatility is a reflection of the times and not a concerted effort amongst the deepest pockets.




Quote from yenzen:

To an extent I agree. But here is where I would argue differently. I believe the big money does accumulate the positions in a much more subtle manner than in prior years. When their position is near completion, then they employ the above tactic. But I do not believe that this is simply something that is done intra-day for no other purpose than to simply game the intra-day time frames. It is implemented for a much more macro purpose, to dampen volatility, to encourage other speculators to join in on the bid and to systematically squeeze shorts out of the markets.

The big problem occurs on those pesky gaps, downgrades, and other unforeseen events. So I doubt the strategy would be employed for too long a period of time or without a big enough buffer in their average cost not to make it more than worthwhile.

Senor Zen
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Quote from RainMaker3000:

cost of capital
why risk it day trading when you can get risk free 15 basis points on a billion
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Because a trader wants Soros, Gates, Buffett, Walmart family, Ellison money vs Oprah, Trump type money.
 
Two Words: Nick Leeson.

Bullying/propping up the market doesn't always work. Soros has had his successes manipulating currencies, but only when he has the fundamentals working in his favor in the first place. (Ringitt overvalued, etc...)
 
I strongly disagree with the original poster. Remember, if you are a "fast money" account, you eventually need to get out of what you get in to. If I bought a $1 Billion of JDSU and was forced to ulimately sell that $1 Billion of JDSU, especially in a short time-frame, I'd soon be far less than a billionaire.
 
Quote from trade-ya1:

I strongly disagree with the original poster. Remember, if you are a "fast money" account, you eventually need to get out of what you get in to. If I bought a $1 Billion of JDSU and was forced to ulimately sell that $1 Billion of JDSU, especially in a short time-frame, I'd soon be far less than a billionaire.
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Exactly. Ask the Hunt brothers or LTCM. Getting in's easy. After all no one has a clue as to how much another player is initiating. However during liquidation every participant knows that size is in the pipeline.
 
Quote from trade-ya1:

I strongly disagree with the original poster. Remember, if you are a "fast money" account, you eventually need to get out of what you get in to. If I bought a $1 Billion of JDSU and was forced to ulimately sell that $1 Billion of JDSU, especially in a short time-frame, I'd soon be far less than a billionaire.
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Well, there's a right way and a wrong way to do it.
Take for instance the Friday takeover rumor scam. Honeywell is a very liquid stock, trading about 4 million shares a day. On Thursday/ Friday May 5-6 the manipulators eaisily and quietly picked up millions of dollars worth of HON stock. That Friday morning all they had to do was buy just a few hundred grand worth of worthless deep OTM calls. The 'unusual options volume' is noticed and the rumor begins to spread. The stock steadily begins climbing. Once it's up 2 bucks on the day on heavy volume CNBC picks up the story and every big dreaming idiot wants a piece of the action. The scammers easily sell their shares 2 1/2 bucks higher, and even the worthless options bought to start the scam are unloaded at a profit. The scammers make millions, and Joe Schmoe investor is left holding the bag.
 
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