We have lots of experienced traders on MoneyAM who would be glad to help if you have any trading questions.

Dannycarswell - just to confuse things on the p/e situation. Sometimes a company will have a high pe ratio because the market is expecting strong earnings growth so they rate the shares highly - the pe ratio is historical and does not necessarily reflect the current year's trading. So a growth company could have a slightly higher than average pe ratio yet still be worth buying. Worth finding out brokers estimates of future prospects. Agree with everyone else though that overall low pe's are the best firms to buy into.

Zoltar

quote: "I awoke in the middle of the night with one short sentance in my head that was said at the course that I'd missed; it made the difference between a wasted day and a course worth every penny."

How about sharing that sentence.

Croc, here is a question for you. I asked it on another board but got no replies.

I have been looking at the volume of trades in Jarvis on the Money AM site over the last three weeks. The effect I am interested in is most prominent over last weeks trades from 19th Jan to 20th Jan.

In that period the Volume record is listed as follows:
Total Buys Total Sells Total Unknown
12,874,902 9,961,496 1,318,661

The imbalance in buys to sells is 2,913,406.
If you put all the unknowns on the sell side there is still an imbalance of 1,594,745 shares on the buy side. (The imbalance over the 3 weeks is a 141k more than this.) With greater volume on the buying side one would expect the price to go up, but the reverse has happened the price has been falling. Why might this be so?

Does it mean that the market makers are shorting the stock? If so how long can they leave their position uncovered?

Firstcall
Yep, For every buyer there is a seller and seller a buyer. So when transactions go through the computer it 'guesses' whether it appears to be a buy or sell. For example Company X Buy Price 98p - Sell Price 100.
Last Transaction 500,000 at 98.49p
Is that a 'Buy' or 'Sell'? hmmm. Because of the size of the trade it is probably well over the market size so would have been delayed. If the price has moved up in the last hour it could have been a 'Buy' when it appears now to be a 'Sell'
In any case that was a 'Buy' for someone and at the same time a 'Sell' for someone else!
Often on the BB's you see a statement that "Company X has had 80% buys today so why has the price fallen !!!!!?"
And thats why
Hope that helps
D.

Croc, yes, that helps a bit. Thanks.

But as I understand it MoneyAM tend to put late recorded trades under the 'Unknown' column. If the exact time of the trade is known then presumably if the trade is nearer the offer price than the bid, it is much more likely to be a buy then a sell.

Would Market Makers sometimes end up short of stock they have sold. If so, how long do they have to balance their books? I mean are there set settlement dates for Market Makers? Or is there Industry wide best practice criteria they might follow?

Furthermore would you be able to explain in plain English what the following trade types mean:

K , P, VW , BC

Much obliged for your assistance.

FirstCall - Jarvis is now a SETSMM stock - when AT trades go through, the moneyam stats add the trade to the side of the person who took the order rather than the person who advertised it.

eg - if a share is trading at 98-102, and croc adds a sell order at 101 which I buy, moneyam will record that as a buy @ 101 in a market thats quoting 98-101, whereas in fact it is both a buy (from my perspective) and a sell (from croc's). If you are trying to second guess the MMs, then you need to eliminate the AT trades, and just look at the 'O's - but bear in mind that an MM can also trade with AT trades if he wants to.

Frankly, the entire exercise is pointless - but people like to do it, so moneyam give them what they want.

Most of the trade types are here http://www.snappytrader.com/info/info.htm#types
Market Makers do hold long or short positions but they are a canny lot and you can bet they do so at a minimum risk. That means not holding great amounts unless they have a buyer or seller to cover them.
Thanks Gausie, better explained than my attempt!

Gaussie

Quote, "Frankly, the entire exercise is pointless." LOL you may well be right, But newbies like me are always trying to learn, what effects the market. Nothing beats learning the hard way. Or does it?

Thanks for your answer.

Croc, I copied the trade types listed in snappytrader. The k and P I didn't understand, and the VW and BC I didn't find? any clarification in simple English would be appreciated.

VW is a volume weighted trade - ie a trade where a broker has picked up or disposed of stock in the market at varying prices and then fills his client at an average price weighted by volume (VWAP) -

Here's a likely scenario:

I tell my broker to sell 100,000 FKI at the best price he can because I'm convinced they're going down cos they're pants! (you need to subscribe to the Traders room for more detailed reasons) He sells 25k @ 120p, 50k @ 110p and 25k @ 50p - all in the space of an hour.

The VWAP is ((25 x 120) + (50 x 110) + (25 x 50))/100 - so in the trades you see him settle with me with a trade of 100k @ 97.5 marked as VW.

I then cover FKI at 40p (my target) and everyone's happy.

;o)

Especially you Gausie!

Can anyone please explain how a buy [RTD] at 18.75 on level 11 can be discounted by as much as .08 Is this a deliberate attempt by the money makers to keep the price low?
Also no many how many shares are bought the figures on the buy side never move.

Thanks in advance.

When I look at L2, I always enter a figure in the filter as there are orders which are there to distort what you can see and this removes them!

At the end of the day a MM is there to make money - and they do sometimes play against each other.

Thank you little woman

Can you please explain how I can use the filter as I cannot find one on the level 11 screen and what figure would you use. Is the filter on the level two screen?
Thanks again

washlander, trades inside the dislayed bid offer spread with no associated trade code are often trades executed via a retail service provider and are often small trades (NMS or below). If you use an execution only service like comdirect or idealing, you will almost go through an RSP or 'price-improver' although the 'improvement' in price is often modest.

Washlander - I presume you have Moneyam L2 screens? On theirs (I've not used anyone elses so don't know if they are the same) above the actual orders are the words BUY ORDERS Filter (%) & SELL ORDERS Filter (%). Next to both is a box - you can enter a number in this box and as you do it watch the change at the bottom of total orders & depth. Some shares you can use whole numbers, whereas others you need to use fraction. Just experiment.

Firstcall.
The sentence was 'It should jump out at you'
Make of that what you want to....
ZOLTAR

Thanks Dominic.
Hello Little woman. I have level 11 [i paid for the top service with moneyam]. However I do not see anything on the level 11 screen other then the edit display that I can enter anything in. This only appears to allow me to change the default colours.
Sorry to be a pain.

Washlander - can you see the words "BUY ORDERS filter(%)?