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Originally Posted by MTG#10
Look dude, you're the one who popped in to shit on the Reddit link I posted. Debunk what the guy found and explain what all of that information he stumbled onto really means or stfu.
And there are a hell of a lot more players on that list than Vanguard and Blackrock but you missed the point anyway...its not the total amount of shares all of those firms own, it's the significant increase of their buys AFTER the price shot up. The Motley Fool (appropriately named) article you linked wasn't even in the ballpark of how many shares those two own, Vanguard is now in over 43 mil and Blackrock almost 27 mil..that's a hell of a lot more than Fool's claims of 5k and 4k. But nice try champ.
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Okay.
First, 'champ,' your reading comprehension is embarrassing for an allegedly critically-thinking adult. The Fool's claim of 5k and 4k were the numbers of stocks these two institutions owned. It said nothing of their positions in any of the stocks you traffic in. But, good on you for spending time to read through a short blurb of information I provided you and not being able to grasp its simple meaning. It doesn't bode well for your ability to decipher the more complex topics we're going to move onto.
Blackrock and Vanguard have a number of funds and managed accounts that track indices. Do you know what happens when the price of these shares goes up relative to other stocks in the index? Hint: they become a larger part of the index. Then, funds like Blackrock and Vanguard buy more of the shares to reduce tracking error versus the index.
So, there's no mystery or surprise why those funds would be buying. It says nothing of their value or lack thererof.
As for the reddit thread, it's difficult for me to get past the first part:
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Do this infuriate you? It Should....
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Why would placing a bid ~$160 below the market infuriate you? Why would that influence the price of a security?
If you told me that someone was placing a very large order to sell one of your meme stocks right around the close at a price just slightly higher than the market in order to scare people into selling, I can see why you might feel that has meaning. But an order far away from the market has no bearing on the price of the security. If you feel different, explain why.
Second, MEMX. It was created by a consortium of banks who were tired of being overcharged by the larger exchanges (NYSE, etc). I realize you think that banks are cabal and everything they do is evil, but sometimes they do things just to save money. They created this exchange with that idea in mind over the longer run.
This guy looks at the exchange codes and singles out 'z' to be 'most disturbing.' Why? Because it REMOVES LIQUIDITY. Sounds scary, right? Wrong. Any market order 'removes liquidity' because it's immediately executed. Non-market orders add liquidity. If you spent time looking at the fee schedule, it's what you'd think. They charge fees when you remove liquidity (i.e., price taking) and rebate you when you add liquidity by showing prices. They are attempting to encourage market participants to show bids and offers and even paying to do so to develop critical mass. This is how competitive markets with start-ups work in all forms of life.
This 'z' code specifically though mentions that it both removes liquidity and is routed to another market. Does that sound scary? I'm not 100% sure how this exchange is set up, but you'll notice that this 'z' order where you essentially buy/sell at market and it's routed to another exchange incurs a cost that is 6x more expensive (which is *a lot*) than one where you buy/sell at market on MEMX. My guess is that's meant to encourage the members to trade on MEMX and not to use it to route the order to other exchanges, and thus the very punitive rate.
So, knowing all that, are you infuriated? Or is it more likely this guy posted a bunch of stuff without connecting dots or really understanding what he was doing and you just took him at his word that you should be infuriated rather than doing your own DD and realizing what he meant?
I don't care if you champion meme stocks. I don't care if you make or lose money in meme stocks. People make money in bad trades all the time just as people lose money in great trades - it's the nature of the market.
I only care that you continue to post the same stuff over and over again about hedge fund manipulation as if you have any clue what you're talking about.