To give you an idea of how widespread the problem is, a new study to be published in the Journal of Finance and Quantitative Analysis finds that option volume in a specific stock begins to surge three days before unannounced analyst upgrades or downgrades of a company.
This includes an in-depth study of the volume patterns that I use to determine the strength of a stock's trend.
Thorp may have been the first to discover that Madoff could not have been hedging his customers accounts because the actual reported volume of trading in stock options was a small fraction of the trades that he alone was claiming.
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Huge stock trading volume spikes in the last couple of days have been a boon not only to the exchanges but to the new crop of alternative trading sites that have been trying to siphon market share away from them.
With a little stretching Gruber can call Agco, the U.S. farm equipment maker, a Latin stock since it will do 20% of its sales volume in South America this year.
You can go a little outside of this range if the stock is moving, has low volume or you anticipate volatility and want to ensure your order is filled.
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They determine this by looking at a complex set of lines overlaid onto a stock chart, such as moving averages, support lines, volume activity, etc.
Overall volume in PEP options was roughly three times the average daily level for the stock as of 11:00 a.m.
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We normally wouldn't touch airlines with a ten-foot pole, but the short-term technicals are positive, with the stock breaking higher out of a multi-month base, pulling back on light volume and accelerating higher again.
"It became very clear that we had no control of the volume or price of our stock in any way, " said Global Links Chief Executive Frank Dobrucki , in a March 15, 2005, letter to shareholders.
Getco already casts a tall shadow over daily trading, by some estimates roughly 20% of stock market volume, so for it the move is symbolic of changes it has been trying to lead over the last decade.
The on-balance volume (OBV) is in a solid downtrend (line b), indicating that money is flowing out of this stock.
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