Forum Topics Copycat orders
Slideup
Added 2 years ago

Can someone explain what is going on here. I have been noticing that when I put a limit order in through Stake, generally to purchase a microcap stock, usually happens in the ones with lower daily trading volumes, that my order is immediately (within microseconds) followed by several copycat orders, most of the time I am first in the cue but on occasions my order has been pushed to second spot. It usually occurs when I am bottom fishing.

For an example I just put a small order in for Volpara Health (VHP) to buy 3754 shares @ $0.665. This was immediately followed by 5 other orders as shown in the screen grab below. Prior to my order going in there were no other orders in the market above $0.66, and the $0.66 order number (7) and volume (14960) didn't change as a result of my actions. So these 5 orders that followed mine are new to the market. Does anyone know what this is, is it just algorithm trading or slow steady accumulation by someone, who is spreading it across multiple orders and trying not to influence the price? I seem to notice it occurring a lot more now that I am using Stake to execute my orders. It seems weird that anyone would be interested in what I am doing so it might just be a coincident but seems odd. Anyone else observed this or similiar?

bfd3ee31f6808a4f9d85b4c716aa965677a994.png

The sum of these extra orders was almost the same total volume (3754 vs 3704), with the trades spread across the ASX and CXA platforms.

1f60e0206a4a45940241743e0b97cd2b3cc0df.png



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Rick
Added 2 years ago

I believe these bids are from Market Makers@Slideup. While it’s more common in derivatives where the ASX actually pay Market Makers to improve liquidity, I believe this also happens with low liquidity shares. Sometimes, I notice when there is a large gap between buy and sell bids, they will even come in over the top of your bid in attempt to close the gap and stimulate a trade. Some info here: https://www.ig.com/au/glossary-trading-terms/market-maker-definition

Others might have better insight into this.

Cheers,

Rick


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Solvetheriddle
Added 2 years ago

@Slideup it has happened to me, rarely, but in the same cirumstances. i always thought it was algos front running trades, maybe taking out an offer and immediately going on the offer at a fraction higher price, so you pay up. if the algo does this many times over maybe there is a profit in it. i could be completely wrong but thats what i think it is, and to quote charlie munger its disgusting and should be banned lol

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UlladullaDave
Added 2 years ago

The ASX don't pay market makers they just offer fee rebates. At least that's how it works in the options market and the reason why there is no depth whatsoever. What happens on other exchanges is market makers get rebated down to zero and on some exchanges and in some products get order priority based on how much depth they provide. In effect the MM's are heavily incentivised to provide tonnes of liquidity. What happens in cash equities is most likely algos front running trades.

I would have thought given this country's proclivity to bet on absolutely anything the ASX could have seen a nice little revenue stream from a deep options market. But monopolies don't think that way I guess.

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