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Online Share Trading

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Whats going on here??

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Vish_1
Contributor
There was a 20% drop at one stage today in Wescoal on the back of small volumes. Any ideas as to whats going? It triggered my stop loss unexpectedly, which is surprising especially if there is no concrete reason. They have posted a decent set of results lately as well, yet the market has not responded. I'm confused! Anybody got any clues??
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12 REPLIES 12
Harathke
Regular Contributor
That was really silly having a stop loss in an illiquid stock. It would be wise not to repeat that approach in the future.
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Vish_1
Contributor
Perhaps you right about that. It is strange though..cos number of deals have increased as well..so I'm suspecting something may be going on. But point taken.. My bad i guess..
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Not applicable
you could have been victim of a stop hunt. If the buyer volumes are thin, someone could put in a sneaky sale at 165, for example, for like R200 to flush out the stop losses and pick up R70k worth of stock at 150
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Not applicable
you could have been victim of a stop hunt. If the buyer volumes are thin, someone could put in a sneaky sale at 165, for example, for like R200 to flush out the stop losses and pick up R70k worth of stock at 150
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Vish_1
Contributor
I think that's exactly what it was. Just noticed there was a R700 deal @ 150 and thereafter, R43000 changed changed hands at 150. Sneaky *****s..!! PS. But surely they would have to be a buyer at 150 first before stop losses are activated??..so i presume there could be some collusion involved..
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Galuc
Super Contributor
Not necessary collusion, they sell part of there portfolio to kick in the stop losses and then buy when the stop losses kick in.
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Vish_1
Contributor
Apologies...that was actually a R1050 trade (700 shares) and then an approximately R71000 trade..
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Vish_1
Contributor
Agreed...but there would have to be a willing buyer at at the exaggerated lower price? Who would reasonably expect their bid to match if the market is currently dictating otherwise?
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DaMerlin
Contributor
Many a person put in unreasonable trades in the hope of someone messing up a trade. If you look at almost every share, there will be someone with a 1c bid in for example...
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Galuc
Super Contributor
And that is why it can only be done on stocks with relatively low volumes, ie, they create the seller and the buyer
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DaMerlin
Contributor
They don't have to be the buyer as well, but you are correct in saying it usually occurs in illiquid shares. However, take a look at the SHF NPL's today. Random spike up to R40, either someone messed up a trade or he pushed up the price in the hope of selling more on the way down
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rsalie
Super Contributor
more weakness since then and buyers seem to have dried up. I'm looking to add some at cheap levels.
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