How, literally, do the non-retail entities trade?

[Simples]

Any large volume order may attract more trading around that level or even cause reversals and trends (ie. someone big is supporting the market). Basically large orders will want to hide over time, not create icebergs on the DOM, in order to prevent predatory market behaviour and bad fills.

How to do this most easily? Buy dips and sell peaks will provide good fills and hide alot of the activity, especially when done over time with smaller, more innocent-looking orders through different sources. Since traders and predatory HFTs have tried to decipher such activity, ie. when they are too predictable, randomizing the entries have even been used, though dark pools are also useful to hide intraday activity.

 

[Robert Morse]

From inception to execution, assuming it's not fully automated.

I guess I have always found it a funny idea to imagine that somewhere at a renowned hedge fund is still some guy in front of a computer pushing BUY and SELL, except they're operating with far more capital and have to iceberg their orders while a team of people backseat drive his execution and everybody fights over the charts.

You might find that the main difference is that many hedge funds use trading desks or floor brokers to execute vs an electronic trading platform. They pay for research. They pay for trading ideas. They pay to hear about money flows. They find it is a cost of doing business.

 

[cjbuckley4]

A large subset of non-retail entities are market makers.

 

[patrickrooney]

They often use the same technology and software that is available to and used by the retail trader. Technology has come a long way in a few short years and functionality that used to be out of reach for the retail trader is now attainable, and cost effective, for retail traders.

Take a look at the TT platform. This platform is available to and used at by leading hedge funds and investment banks as well as traders who are new to the craft. The fastest commercially available futures trading platform is available to everyone.


https://www.tradingtechnologies.com/try-tt/

 

[OctopodeClub]

Around which sort of volume does it become difficult to find liquidity? (Not that it applies to me...).

Just curious, how much one has to purchase for all of this to become an issue (10mm, 50mm, 100mm ?).

 

[sle]

In general, people talk in terms of multiples of ADV. Once you hit 10+ percent of ADV, it is in general considered that you can't execute in a single day, though you can accumulate over time or get a block quote.

PS. Volatility of the stock matters too. When the block desks come up with block prices (i.e. discounts for block bids and premium for block offers), they usually take the ADV and stock volatility, assume some reasonable percent of ADV (e.g. 10%) and got from there.

 

[dealmaker]

From inception to execution, assuming it's not fully automated.

I guess I have always found it a funny idea to imagine that somewhere at a renowned hedge fund is still some guy in front of a computer pushing BUY and SELL, except they're operating with far more capital and have to iceberg their orders while a team of people backseat drive his execution and everybody fights over the charts.

Look at Steve Cohen's monitor and the person sitting next to him they both have charts up ( I am guessing that is Doug Haynes' desk).

 

[Metamega]

I think the edge comes from the scrolling ticker bar around the office.

Need to get me one of those lol

 

[OctopodeClub]

Wow, information overload there!

 

[vanzandt]

I like the Sam's Club sized bottle of Aleve off to his right. The dudes a billionaire, but if he hired a personal trainer and dropped a few pounds, he probably wouldn't have so much joint pain. jmho.