These are Index Arb trades. They are done in massive size, for a miniscule, yet riskless profit. About 30-50 basis points annualized return. Much of it says its for their account, they prinicpal the trades, then flip them to customers in CFD's. They also sell 'options' offboard, to guarantee certain returns to customers thru CFD, their algorithms constantly delta hedge their exposure looking like program trades. It's not the 'prop' desk, it's the sell-side derivatives desk you are reading about.
So today at 3.41pm with size to buy everywhere, I blindly put out a short in WFC. 3mm to buy on the bell was the imbalance. I sold it at $19.75. It ticked up to 19.77 at 3.42pm, I thought my theory was going by the wayside. I covered at 3.45pm at $19.43. It closed amazingly 15 min later at $19.97. I was so amazed, I forgot to go long it after covering.
Bob Pisani was talking about how the Quant Funds were shorting more into this rally, seeing as they have been decimated by it. Every time he came on he mentioned it how much trouble they were in?