Quote from gemini_315:
It appears that many of the stocks that have great momentum and that end up performing well, are lower volume stocks. Since mutual funds place extremely large orders, do they actually trade these type of stocks? Do they follow any kind of guideline for the amount of shares they would buy as a % of daily volume.
Quote from gemini_315:
I don't trade stocks but hope to soon. My question to the experienced stock traders out there is: What would be the maximum position size in shares of a stock that one should hold in a trade in order to ensure that one could get out of the position with minimal slippage. I would imagine this would be some percentage of the daily volume that would be deemed to be safe.
I was recently listening to a presentation where the presenter claimed to have positions of 50,000 shares that he was able to get out of without any liquidity issues. Unfortunately, I did not get any further details.
Quote from Grob109:
Along the lines of fast trader's reply and OT vis a vis the above
The rules for trading come from two constraint facets: your capital and the market's liquidity.
I position trade over several days.
My constraints are that I focus on one money stream a day and therefore I have but 6 to 8 streams maximum. I buy with each stream up to the limitation the market and my method then dictates.
My method is designed for high volatility stocks of high quality. They are constrained to a maximum float and that gets me to a daily quantity traded per day. Max float is 30 million.
My exits dictate the number of shares I can buy. I will buy no more than 10% of the daily exit volume of a given stock when it is peaking. I determine the peaking volume of every stock I consider owning. I cannot allow myself to buy a stock that has a DU (Dry Up) volume of less than 200,000 share per day. This is about 25% to 35% of the 65 day average volume.
The final constraint is the fills on the exit of the stock. I exit with partial fills that are equal to or less than the upper size blocks going through on the T&S.
I have a hard upper limit of shares owned in any particular issue as a consequence of all of this. I am an amateur and small potatoes compared to others. But I do have a high rate of capital appreciation by doing what I do.
I have an absolute upper limit for the types of stocks I trade at 100,000 shares ownership per stream of money in my captial. I enter in a day and exit in a day. I do not trade more than 10% of the cumulative volume at any time during any given day. As an example: an exit on 100,000 share of a 28 dollar stock will take about 4 1/2 hours when 1,1 million shares are traded and approximately 31 partial fills are required. A corresponding entry on that same stock required 20 partial fills and the average price at that time was about 11 dollars where the entry day volume is on the first of second day of Break Out volume from the DU volume.
Is it possible to contact the speaker and get that information? Post it here if you do.Quote from gemini_315:
I was recently listening to a presentation where the presenter claimed to have positions of 50,000 shares that he was able to get out of without any liquidity issues. Unfortunately, I did not get any further details.
Do they trade lower volume stocks?Quote from gemini_315:
Is this the way Mutual Funds buy lower volume stocks?
Quote from gms:
Is it possible to contact the speaker and get that information? Post it here if you do.
Do they trade lower volume stocks?
Quote from gemini_315:
The post and presentation you are quoting are from 2 years ago, so I'm afraid I don't have any further detail.
My question from posts within the last few days pertains to Mutual funds and what their position is when it comes to stocks that are low daily volume eg. < 500,000 and that perform extremely well. Do they trade these type of stocks and if so, how?
Quote from Grob109:
Along the lines of fast trader's reply and OT vis a vis the above
The rules for trading come from two constraint facets: your capital and the market's liquidity.
I position trade over several days.
My constraints are that I focus on one money stream a day and therefore I have but 6 to 8 streams maximum. I buy with each stream up to the limitation the market and my method then dictates.
My method is designed for high volatility stocks of high quality. They are constrained to a maximum float and that gets me to a daily quantity traded per day. Max float is 30 million.
My exits dictate the number of shares I can buy. I will buy no more than 10% of the daily exit volume of a given stock when it is peaking. I determine the peaking volume of every stock I consider owning. I cannot allow myself to buy a stock that has a DU (Dry Up) volume of less than 200,000 share per day. This is about 25% to 35% of the 65 day average volume.
The final constraint is the fills on the exit of the stock. I exit with partial fills that are equal to or less than the upper size blocks going through on the T&S.
I have a hard upper limit of shares owned in any particular issue as a consequence of all of this. I am an amateur and small potatoes compared to others. But I do have a high rate of capital appreciation by doing what I do.
I have an absolute upper limit for the types of stocks I trade at 100,000 shares ownership per stream of money in my captial. I enter in a day and exit in a day. I do not trade more than 10% of the cumulative volume at any time during any given day. As an example: an exit on 100,000 share of a 28 dollar stock will take about 4 1/2 hours when 1,1 million shares are traded and approximately 31 partial fills are required. A corresponding entry on that same stock required 20 partial fills and the average price at that time was about 11 dollars where the entry day volume is on the first of second day of Break Out volume from the DU volume.