Monday, January 4, 2010

The Rambus "fat finger" (RMBS)

For all of you who witnessed in a few seconds you are probably asking what happened? how can this happen? Well first off NASDAQ stocks do not have specialists so if a huge order hits the market it will execute all the way down and or up the book. Which is what happened with rambus,(down) all orders were taken out on the bid.. more supply then demand simple . If there were a specialist this would not have happened. It appears the NSDQ is investigating, rightly so.. Im sure the trade will be "busted", or for those who do not understand.. The exchange will have your clearing firms roll back the trade like it didn't happen if they find issues. One thing i can tell you is whoever fat fingered that is probably cleaning his or her desk out.

 Anyway.. besides the fat finger, there were some hints as to something being up in RMBS.. before the drop there was a large order(600k, highlighted by the blue circle) which hit the market after the price had already slid a bit. To me when you see prints like this you must use them as foreshadowing indicators. Something was indeed up, granted whoever sold sold they sold much to many but in. If you followed this foreshadowing u would have made a great intra day scalp.. risky yes, but sometimes you must embrace risk.

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