Don't you just hate...

dickheads who block your attempts to trade a stock by always outbidding you by exactly 0.0001?

I used to do that when I was new! And now, it just enrages me. It's like they're trying to suck you into a retarded bidding war, where each of your orders get pulled back up to current, a hundredth of a cent at a time.

that is the market and game theory at work... The constant undercutting (and visa versa), even if just a fraction, should in theory have you set the lowest price you are willing to accept.

But I totally agree if your going to better someone's price then do it... but don't piss round with some tiny fraction of a cent. Unless your trading thousands of stocks its not going make any difference.

Nothing like a good sub-penny battle for those out of the money (unlikely to happen) options.

Depends on whether you've got a life or not I guess

I have sometimes put in bids some cents off other bids in out-of-the-money contracts just to get things moving. It is interesting to watch the almost instantaneous reactions. Personally I can't be bothered with sneaky/pissant bids with a variation of $0.0001. Life is too short.

@maxb
/sarcasm (for above).

However, you're assuming:
1. The person who outbids by 0.0001 is the same bidder who returns to outbid again (& again etc)
2. They are wasting their time.

Probably you are being outbid by different people who see 0.0001 as a good premium for preferential execution.
The solution would be to try and fill the spread. Sometimes they can be quite wide (5c etc) or have patience that your order will get filled. By checking all the time you are wasting your own time/life etc ...

In other parts of the forum it's been suggested we need a 'order good until', 'stop-loss' etc etc which I think would help. Maybe an ebay style 'autobid' could work where if someone bids within x of your position it will autobid to a new price? Charge a small fee (for the service) to fund market maker activities etc ...

Obviously it's legitimate to outbid 0.0005 with 0.0006, but not 0.9000 with 0.9001... so how about a new ebay style rule that you have to outbid the previous bidder by at least 1%, unless a lower bid will actually make a trade?

For example to outbid a buy at 0.9000 you'd have to bid 0.9090, and to outbid a sell at 0.1000 you have to bid 0.0910. Anything bid outside that range could be automatically adjusted.

In fact I think I'll repost this at the feature request.

Hi Guys,

I would just point out that there might be a substantive difference between looking to 'acquire' stocks at a small difference of 0.0001 and looking to 'clear' stocks at the same difference.

In the former, it is possibly annoying only.

In the latter, if you want to exit from (cover) a position (long or short) then there is much to be said for being 0.0001 better than the next best buy or sell price.

Alan.

I suppose this is automated bid placing by a bot - I haven't seen it in any of my trades, but from the description:

Quote
andrew93
It is interesting to watch the almost instantaneous reactions.

... it sounds automated to me.

My question to advanced tradergeeks (read: bkd) would be, what would be the advantage of doing this?

Does anyone know of bots trading here for certain?

Are bots allowed (he asks being too lazy to re-read the T&Cs)?

I agree that the 'almost instantaneous' thing is strongly indicative though.

Alan.

Are bots trading? It's hard to imagine there aren't any.

Are they allowed? I see nothing in the T&Cs that rules them either in or out.

What's the advantage of bidding a hundredth of a cent below (or above) an existing bid?
1) As TraderV notes, this is a very small premium to pay for preferential execution.
2) If you're not a "big" trader, but are interested in buying a stock if only it were priced a bit lower than it is now, you might see someone else big bid down the book as an opportunity, reasoning that the big bid will attract trades further away from current price than your smaller bid can.
3) You're action-motivated, and find trading boring unless contracts are changing hands.

Would someone automate this? I very much doubt it. It's a strange, strange kind of non-information based trading if they are. I'd be interested to see if this happens in other contracts in a bundle simultaneously.

Could it be - and this is total speculation - done to affect the operations of a competing bot?

Don't go down that path - it can only lead to mental breakdown!

Alan.

I've had it! I had an order in for .9000 in advance of another bidder by more than a cent and someone just traded at .9001.

Rather than complicating matters, why not just remove a decimal point. If someone needs to trade on less than a tenth of a cent, then we're wasting our time.

Personally, quarter cents would be meaningful, but I can't see that being easy coding.

Know what you're saying tradingmonster and I you and I have been on the same stock. In the end I just cancelled my bid but I think on this occasion it may be a seller trying to raise the bid price as, most of the time they have only bid for about 5 stocks. Like you, I beleive that all bids whether to buy or sell should have a minimum movement greater than .0001 and personally, I'd be happi with .001.

Admin has floated changing the bid resolution to 0.000 somewhere as a future change to be implemented.

It gets a little hairier now with the 0.0035 trading fee though.

I don't see the problem - or, more accurately, I don't see a problem that can be easily resolved.

If the minimum difference is 0.0001, then at peak times you'll have bids lining up at .9001, .9002, .9003 etc. If the minimum difference is .001, then the bids will be .901, .902, .903 etc.

Unless you're trying to acquire 10,000 stocks, no-one actually cares whether they buy at .9001 or .901. The reason why people increase bids by such an incremental amount is to acquire/clear 20 stocks before the competition. The actual price doesn't matter, just the ability to get in first. So the problem of miniscule, incremental bids will always occur and we should just live with it.

I will openly admit that I'm guilty of some preferential bidding by incremental amounts - especially now that sitting orders don't attract trading fees. In fact, it'd be irrational to buy up stock other than through a sitting order if you're confident your sitting order will get picked up. And if you accept that, it's irrational to place your sitting order other than "just above the next guy", whatever the lowest margin.

I'm not fussed if the margin is changed to (say) .001 or even to a whole cent for some stocks. But anyone who thinks that it will stop the practice of people blocking bids by the lowest margin is mistaken.

Of course it won't change the bidding process, but if you want preference, you should have to offer a premium to the existing offer. In the case above, I was offering a 2 cent premium on the next highest offer. They then jumped in front by a hundredth of a cent. I upped the offer by half a cent. They changed their bid to beat the new bid by a hundredth of a cent. I don't care if they need to clear stock, they should do so by making a genuinely significant bid.

Life's too short to press refresh all day.

Depends on the premium you require and the stock you're bidding on. Day to day, many stocks will only move within a few cents - e.g. vote share for Labour/National, or even within one cent - e.g. vote share Greens.

Incremental bids mean more people can jump into that one/two cent gap and increase liquidity on a daily basis without waiting for a big jump. Requiring a premium makes that very unattractive, or even impossible.

A possible solution would be to require different increments for different stocks, e.g. .0001 for the Green vote share, but a whole cent for the NZX weekly stocks which go up and down like crazy. But then you risk (1) inconsistency and uncertainty; and (2) dissuading smaller/hobby players who want to offload their 20 stocks at a small gain (i.e. by placing an order in the order book rather than snapping up existing orders) before moving on.

What increases liquidity more, the 50 stocks that I was seeking or the 5 stocks being sort by someone like yourself who kept jumping me by .0001? In the end I conceded to them and pulled my bid.

I take my share of losses here which I accept, my judgement, my call, that's it but, I'm also here for the fun and that does not include being pissed about by those playing for .0001. When a stock is down to just a few cents that's different but when it's around 90 cents I'm rapidly lossing interest and patience with the .0001 players.

I made some comments a while back (that were probably more constructive, ie. regarding an autobid feature). But I think the often discussed feature of setting an order expiry is much needed so you don't need to check orders as often.

If you really wanted those 50 stock, you could reduce the bid-ask spread somewhat.
I mean if you are bidding say 50@ 0.90 but the nearest sell is 25@ 0.925, you can hardly complain if someone jumps in front no matter how small the margin. Why not take the 25@ 0.925 and try to pick up a further 25 later.
Ultimately you have to wait like everybody else on the bid side.

One idea is to perhaps put 5 orders of 10 in the order book at slightly different prices (averaging to what you are willing to pay). To the untrained eye this can disguise a volume higher than what the MM is set to.

Ultimately the only real answer is more trading volume as what you describe happens more (or at least is more obvious) on the slow moving markets compared to the more popular ones.



Edited 1 time(s). Last edit at 08/26/2011 07:16AM by TraderV.

I agree with TraderV.

If you are giving up on bidding [email protected] because of someone bidding only [email protected], and you're not willing to jump over them to meet the market maker selling [email protected], then I would suggest the market for that particular stock is so devoid of liquidity anyway that your [email protected] wouldn't be picked up in any decent length of time - no matter what the increment - and it's unfair to expect others not to jump in ahead.

I should note also that the incremental bids I do place are more along the lines of active orders well down the books. If I desperately want stocks, I'll just buy them. Life is indeed too short to constantly place the next highest bid at the very top of the order book, and the best way to teach people that lesson is to simply spend the extra two cents taking the closest sell order.

Just a note for the person who blocks EVERY attempt at trading on certain stocks by outbidding people by 0.0001 or 0.0002, and even matching the exact same number of stocks to be traded, then withdrawing that bid if the person making the original bid withdraws theirs.

It is clear that you have no interest whatsoever in actually trading that stock, and that your only intent is to piss people off. You, sir, are a DICKHEAD. It's people like you who ruin everything that's good in the world. Please kill yourself now.



Edited 1 time(s). Last edit at 10/04/2011 10:29AM by maxb.

Know how you feel maxb. Have the problem often and sometimes I just move my bid past theirs by .0001 but this morning managed to get rid of he/she D. Head by moving almost 5 cents as I had plenty of margin to do so. This seems to have dampened their keeness somewhat.

Unfortunately, these pillocks are part of life and I have no doubt that they will be along soon to defend themselves.

I don't understand this behaviour either... I mean, if you want to make a bid, you should have the balls to make a differential bid (not make the same bid with a .0001 difference). I mean, these people will scrap around on ipredict causing significant nuisance for the sake for 10c, yet wouldn't stoop to pick up that same 10c on the footpath.

Except for those large volume/low probability bets, I think it should be common etiquitte to differentiate bids by 1/4c. If you can't do that, then perhaps its a courtesy to drop below a similar existing bid.

Totally agree tradingmonster!