Comments on: How Steve Cohen moves stock A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: SenorAlpha Mon, 03 Dec 2012 02:34:25 +0000 Too many of you pay attention to the wrong things. Too many wannabe economists mixed with egos.

By: TinyTim1 Wed, 28 Nov 2012 18:02:08 +0000 Yeah except he is wrong (AbeB).
100% of the volume is selling – otherwise what the the people who are buying, buying?
A school for ants?

20% of the volume is 20% of the volume.
Every trade is obviously a buy and a sell.
If 100 shares change hands the volume is 100 not 50.
If you are 20% of the volume you have sold 20 shares not 40.

Also the buying at 15 isn’t in question.
It’s the selling at 35 that matters.

However Abe is right that this data doesn’t show anything about how good SAC’s trading desk is.

Our rule of thumb is to stay under a third of the volume and you won’t move the stock.

By: QCIC Tue, 27 Nov 2012 20:57:16 +0000 Well said AbeB.

By: streeteye Tue, 27 Nov 2012 13:13:39 +0000 50% of the volume is selling? there’s a buyer and a seller on every trade, no? (unless the volume figures count that as 2 trades, a buy and a sell?)

By: AbeB Tue, 27 Nov 2012 05:18:15 +0000 At any given time 50% of the volume will be selling. So SAC was 40% of the selling. That’s substantive but they clearly had a bit of patience, selling over seven days in a world of high speed trading is hardly aggressive. As for algos all you really need is one that doesn’t cross the spread (eg something a skilled 8 year old could code) and doesn’t show too much at any given time (bit trickier, but not too hard if you have patience). Basically though its not hard to sell when there are buyers, the real art here is that SAC knew to buy at 15 and sell at 35, and that’s where the insider trading potentially comes in… If you are the only one with the bad news it’s not too hard to find buyers. It’s the people who get out fast when everyone knows the bad news that are good traders…

By: KenG_CA Tue, 27 Nov 2012 04:58:37 +0000 “any time you see a market reporter blaming “selling” for the fact that a stock went down, you can take that with a pinch of salt. Because the lesson here is that an absolutely enormous amount of very real selling can have a surprisingly small effect on a stock’s price.”

That basically says supply and demand are irrelevant. The price was climbing when the sales were made, and it is likely the prices would have been higher if SAC’s shares weren’t on the market. The stock was at a multi-year high when they started to sell, which means people were optimistic about the stock, and given the positive feedback loop that is the stock market, there would be reason for the price to continue to climb. Unless there were more sellers than buyers.

By: clearance42 Tue, 27 Nov 2012 03:33:33 +0000 Agreed with streeteye. 20% participation is (often) not a challenging level to maintain with only minimal market impact. SAC may well have a killer desk, but this trade doesn’t necessarily prove that. Then again, I’m not at all familiar with Elan ADV over this stretch or what VWAP was or what price SAC got for their position… so what I’m saying is – lock him up, and I don’t care about his trading skill.

By: streeteye Tue, 27 Nov 2012 01:17:58 +0000 could be great trader, but sufficient facts are not in evidence… how did that price compare to the VWAP, and how did the stock perform relative to industry and market as a whole in that time period.

maybe some real traders can weigh in, but I don’t think you necessarily have to be a genius to trade along with VWAP at 20% of volume for a few days, hit a few bids in the dark pools if they are there.

when the market is strong and it lets you out, it lets you out… when it doesn’t, it doesn’t.