Archives

Recent Entries

• Screw-yah!

« March 2006 | Main | June 2006 »

May 1, 2006

Screw-yah!

A real-time example of the latest Cramoron to use a market order on one of Jim Cramer's calls on Mad Money. (Click on the thumbnail image to launch a larger image of a portion of my CyberTrader Pro screen from last Friday.) On the Friday 4/28/06 edition of Mad Money, Jim Cramer called a buy on West Pharmaceutical Services (WST) at the outset of his show (time of 18:01, or 3:01 ET). Note the immediate fill at 18:01 on Level 2 Time of Sales of 1000 shares at 47.80, and 1600 shares at 47.40. (You can also see a portion of these fills [1900 shares] at the top of the screen in the ECN Book's Time of Sales. By the way, don't expect ECN Book Time of Sales to perfectly match up with Level 2 Time of Sales after-hours. Sub-100 share ECN fills don't show up on Level 2 Time of Sales during ANY time period. (At least, that's the case with CyberTrader Pro.) But after-hours, most feed providers don't get paid to submit data, which means you may not see a complete match between the two Time of Sales displays. Hey, if you weren't getting paid for the data, would YOU submit it for free?)

What most certainly happened is that someone placed a market order upon hearing the call, without checking to see if the spread was slightly thinner than the Gulf of Mexico. Quite possibly, it could have been someone who doesn't even use a direct access broker, and therefore wouldn't even see the spread. The result of this is that whomever had the shares to sell either 1) made a heckuva lot more profit than they expected to get; or 2) was quick enough to place a short order in advance of or in-time with the call, and now stands to make a minimum of $26,000 if they cover their short quickly!

Likewise, the loser(s) who placed the market order(s) is (are) already $26,000+ in the hole! Now, before some of you shorters or spread-players out there chastise me for blowing the cover on this idiocy, never you worry. This happens EVERY day in "Cramerica." I'm beginning to think there's a Dumb and Dumber Factory out there that spews these knuckleheads out by the thousands.

Posted at 9:56 AM

Home | About | Multiple Displays | CyberTrader | Build a PC | Configure a Dell | Books | Other Stuff | Links | Contact