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Old Jan 28, 2013, 09:32 AM   #1
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'Premeditated Flash Dump' of Apple Shares Behind Friday's Last-Second Slump, Says Trader




A blog entry at Zero Hedge suggests that a deliberate share dump in the final second of trading may have been partly responsible for yet another drop in Apple's share price on Friday.

Zero Hedge cites several Nanex charts as evidence, observing that some 800,000 shares worth $350 million were traded in the final seconds of trading on Friday.
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Unlike traditional flash crashes where the trade is an HFT [high-frequency trading] error, or a few shares traded through the entire bid or offer stack, in this case it looks like a very premeditated unloading of some 800K shares (some $350 million worth) of AAPL in the last second, with the full knowledge it [would] shake the market.
The move brought Apple's stock price down by approximately $5 in the waning seconds of the week's trading, where it sat throughout much of the after-hours trading period leading into the reopening of regular trading this morning. Apple's stock is down another $3.50 as trading opens today.

Article Link: 'Premeditated Flash Dump' of Apple Shares Behind Friday's Last-Second Slump, Says Trader
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Old Jan 28, 2013, 09:35 AM   #2
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I'm glad I don't own any stocks... it just sounds too risky...
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Old Jan 28, 2013, 09:39 AM   #3
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..or the transaction just came in late. Who can say for sure. Maybe the order was put in earlier but was delayed or held.

I doubt there's any "conspiracy" here.
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Old Jan 28, 2013, 09:40 AM   #4
JaySoul
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Didn't Apple already dump Flash?
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Old Jan 29, 2013, 02:08 PM   #5
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Didn't Apple already dump Flash?
Quick. Very quick.
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Old Jan 29, 2013, 12:08 PM   #6
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Originally Posted by ArtOfWarfare View Post
I'm glad I don't own any stocks... it just sounds too risky...
Take it from someone who worked in I.T. for a Fortune 100 brokerage: stock trading is basically gambling, except they all wear suits and ties.
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Old Jan 29, 2013, 12:14 PM   #7
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Quote:
Originally Posted by aliensporebomb View Post
Take it from someone who worked in I.T. for a Fortune 100 brokerage: stock trading is basically gambling, except they all wear suits and ties.
I'm not the most knowledgable person on the subject, but I believe there is a key difference between the two - there's no house. No house means there's no guaranteed winner which means the odds of ordinary people like us winning are a good deal better if we're playing with stocks instead of gambling.
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Old Jan 29, 2013, 12:19 PM   #8
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Originally Posted by ArtOfWarfare View Post
I'm not the most knowledgable person on the subject, but I believe there is a key difference between the two - there's no house. No house means there's no guaranteed winner which means the odds of ordinary people like us winning are a good deal better if we're playing with stocks instead of gambling.
Except that there IS a house, of sorts... that is what this article is about.
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Old Jan 29, 2013, 12:19 PM   #9
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They will just drive it up in a few weeks, and make a few million... Welcome to Wall Street!
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Old Jan 29, 2013, 12:44 PM   #10
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Quote:
Originally Posted by ArtOfWarfare View Post
I'm glad I don't own any stocks... it just sounds too risky...
its riskier keeping your money in a bank account earning only 0.3%

----------

Quote:
Originally Posted by aliensporebomb View Post
Take it from someone who worked in I.T. for a Fortune 100 brokerage: stock trading is basically gambling, except they all wear suits and ties.
If you dont know what youre doing then yeah

Last edited by pizz; Jan 29, 2013 at 12:58 PM.
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Old Jan 29, 2013, 01:52 PM   #11
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If you dont know what youre doing then yeah
I think you've highlighted the problem. There shouldn't be much to "knowing what you're doing." Find a company that is solid in what they are doing and is likely to continue to generate a profit and INVEST. If it's more complicated than that, it is illustrative to the GAMBLING going on, rather than INVESTMENT.

I think many of you are missing the big picture that investment *should be* a two-way street, not a get-rich-quick game for day-traders. Apple is controlled by the idiocy going on with their stock. They can only ignore it so long, and then they will have to make stupid, short-term moves to satisfy the idiots rather than what is really good for the company.

Sure, a few who, as you say, "know what they are doing" will make some money, while hurting the companies they are gaming with, essentially sawing off the branch under their feet. Unless they have an escape plan, even the rich are eventually not going to be very happy when it all grinds to a halt.
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Old Jan 28, 2013, 09:40 AM   #12
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This move is called shorting the stock. get owners scared, sell. Once the price gets to a designated spot, start buying again. Its extremely risky, but making making money on loss, priceless. Apple's stock is going to continue to fall to cover the gap. Apple could go bellow 400.00 by February. Apple is in trouble if it doesn not fix it this year. Apple can easily retake the market with a revampt IOS 7, iPhone, iPad and a new "special product."
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Old Jan 28, 2013, 09:42 AM   #13
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Originally Posted by hovscorpion12 View Post
This move is called shorting the stock. get owners scared, sell. Once the price gets to a designated spot, start buying again. Its extremely risky, but making making money on loss, priceless. Apple's stock is going to continue to fall to cover the gap. Estimate price per share my Friday is below 400.00.

I can't see them going up to anywhere near where they are - if owners sold means they are at a loss - why would they rebuy? I can imagine this will trigger a mass-sell.
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Old Jan 28, 2013, 09:51 AM   #14
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If you look at the long term trend, 2012 looks like an anomaly.... right now the stock is back in line with the trend over the previous few years, maybe a tad below.

http://www.google.com/finance?chdnp=...cjeLJP6lgPA-QE


Even right now, the stock price is still higher than it was 12 months ago. People who are investing long-term shouldn't be fazed.
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Old Jan 28, 2013, 10:00 AM   #15
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I can't see them going up to anywhere near where they are - if owners sold means they are at a loss - why would they rebuy? I can imagine this will trigger a mass-sell.
It's up almost 2% this morning. Is it normal for mega cap stocks like this to be so volatile?
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Old Jan 28, 2013, 09:48 AM   #16
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Originally Posted by hovscorpion12 View Post
This move is called shorting the stock.
I up-voted your comment - not because I liked it, but because you nailed it.
Many people don't realize the type of "artificial" manipulation of the market that shareholders can weild.

I heard again on the news today about how Apple stock tanked last week because they fell short of analyst's predicted earnings - albeit with another record-breaking quarter?
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Old Jan 28, 2013, 09:53 AM   #17
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If they're just going to artificially manipulate the stock markets, shouldn't it be illegal for Analysts to have a stake in the companies they toy with? (I'm not just talking Apple here.)
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Old Jan 28, 2013, 10:08 AM   #18
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I heard again on the news today about how Apple stock tanked last week because they fell short of analyst's predicted earnings - albeit with another record-breaking quarter?
Yup - how much of the loss was honest "fell short of analyst's predictions" reaction vs. how much was this flash dump? Most of the loss appeared in the last seconds of trading, which appears to be this flash dump. One would expect that any loss due to analyst statements would have occurred right after the earnings announcement.
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Old Jan 28, 2013, 10:11 AM   #19
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Originally Posted by extricated View Post
I up-voted your comment - not because I liked it, but because you nailed it.
Many people don't realize the type of "artificial" manipulation of the market that shareholders can weild.

I heard again on the news today about how Apple stock tanked last week because they fell short of analyst's predicted earnings - albeit with another record-breaking quarter?
Apple is a good buy at the moment based on the companies fundamentals. This dump was calculated to trigger a lot of automatic trading when peoples stop loss limits were hit. Big investors manipulating the market to pump some money out of the small investors. Nothing new, eventually it will settle down once all big investors think they have milked it enough.
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Old Jan 28, 2013, 10:29 AM   #20
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One of the more interesting articles I've read on MR lately. Hope there are more like this in the future now that another member of staff has been added.
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Old Jan 28, 2013, 09:59 AM   #21
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Quote:
Originally Posted by hovscorpion12 View Post
This move is called shorting the stock. get owners scared, sell. Once the price gets to a designated spot, start buying again. Its extremely risky, but making making money on loss, priceless. Apple's stock is going to continue to fall to cover the gap. Apple could go bellow 400.00 by February. Apple is in trouble if it doesn not fix it this year. Apple can easily retake the market with a revampt IOS 7, iPhone, iPad and a new "special product."
Shorts are considered sales for calculating volume?
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Old Jan 28, 2013, 10:08 AM   #22
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Shorts are considered sales for calculating volume?
When an investor goes long on an investment, it means that he or she has bought a stock believing its price will rise in the future. Conversely, when an investor goes short, he or she is anticipating a decrease in share price.

Short selling is the selling of a stock that the seller doesn't own. More specifically, a short sale is the sale of a security that isn't owned by the seller, but that is promised to be delivered. That may sound confusing, but it's actually a simple concept.

when you short sell a stock, your broker will lend it to you. The stock will come from the brokerage's own inventory, from another one of the firm's customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. Sooner or later, you must "close" the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.
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Old Jan 28, 2013, 10:06 AM   #23
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Quote:
Originally Posted by hovscorpion12 View Post
This move is called shorting the stock. get owners scared, sell. Once the price gets to a designated spot, start buying again. Its extremely risky, but making making money on loss, priceless. Apple's stock is going to continue to fall to cover the gap. Apple could go bellow 400.00 by February. Apple is in trouble if it doesn not fix it this year. Apple can easily retake the market with a revampt IOS 7, iPhone, iPad and a new "special product."
Ok, no one knows for sure where the price is headed, (especially not me) but as of right now, about 10:05 AM Monday, the stock is at 448.23 +8.35 (1.90%). It looks like they sold it around 443. So at this point, these folks are out a little over $4M.

Risky indeed.
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Old Jan 29, 2013, 08:04 AM   #24
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Quote:
Originally Posted by hovscorpion12 View Post
This move is called shorting the stock. get owners scared, sell. Once the price gets to a designated spot, start buying again. Its extremely risky, but making making money on loss, priceless. Apple's stock is going to continue to fall to cover the gap. Apple could go bellow 400.00 by February. Apple is in trouble if it doesn not fix it this year. Apple can easily retake the market with a revampt IOS 7, iPhone, iPad and a new "special product."
this has very little to do with apple.
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Old Jan 28, 2013, 10:34 AM   #25
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Conspired

I imagine it is not illegal for large funds to conspire to short a stock, but I wonder if reinstatement of the uptick rule would slow it down. The same with High Frequency Trading.

Last edited by J1989; Jan 28, 2013 at 10:43 AM.
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