T Trades, Cross Trades and Iceburg Orders

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What is a T-Trade, and what does it mean? What is an iceburg bid?

You may say, I thought OTC did not have any after hours trading? Well, it does not. Those are T-Trades.

http://www.investopedia.com/terms/f/formt.asp

DEFINITION of 'Form T'

A form that FINRA requires brokers to use for reporting equity trades executed outside of normal market hours. Form T trades occur during extended hours - before the market opens and after it closes. The objective of the Form T reports is to maintain market transparency and integrity.

BREAKING DOWN 'Form T'

Trading in extended hours enables investors to react quickly to events that typically occur outside regular market hours, such as earnings reports. However, liquidity may be constrained during such Form T trading, resulting in wide bid-ask spreads. Form T trading is especially suited for overseas investors, since they may conduct the bulk of their U.S. trading when their markets are open but U.S. markets are closed.

Cheds Breakdown:

Are T Trades always Dilution?

Here is what our good friend Janice Shell has to say about T Trades:
Janice Shell

You're over-complicating this. When a big holder wants to sell, he calls an MM. They set a target price for the trade, which will be executed in relatively small lots (usually) throughout the session, in the hope stock price won't be seriously affected. Sometimes the trades double print; that shouldn't happen. Sometimes the MM takes his fee off the top; that is reflected in the price of the T-trade.

Except for occasional late trades that print seconds after the bell, all t-trades are executed during the session, but reported after the close.

ICEBURG ORDERS

Think about when you see VFIN, or VNDM, or with a 10k ask lot, for example.

BID ASK
CSTI 100,000 .0023 VFIN 10000 .0025
NITE 100,000 .0022 CSTI 200,000 .0028
CDEL 125,000 .0022 CDEL 225,000 .0028
MBAY 150,000 .0022 MBAY 175,000 .0030

Note how there is only an iceberg at .0025 (10k ask lot, or bid lot is often referred to as an iceburg)

DEFINITION of 'Iceberg Order'

A large single order that has been divided into smaller lots, usually through the use of an automated program, for the purpose of hiding the actual order quantity.

BREAKING DOWN 'Iceberg Order'

When large participants, such as institutional investors, need to buy and sell large amounts of securities for their portfolios, they can divide their large orders into smaller parts so that the public sees only a small portion of the order at a time - just as the 'tip of the iceberg' is the only visible portion of a huge mass of ice. By hiding its large size, the iceberg order reduces the price movements caused by substantial changes in a stock's supply and demand.

Cheds Breakdown:

So, note the iceburg order at .0025 via VFIN. All off a sudden the ask gets slapped several times, for a total of 1 million shares, but you do not see the 10k block fall.

After ours, you may see a T-Trade, which is just the market market reporting the volume that was not reported before. They only showed 10k, but actually asborbed a lot more.

Other resource information on T Trades:

https://incrediblepennystocks.wordpress.com/tag/form-t-trade/

Wtf is a cross trade?

http://www.investopedia.com/terms/c/crosstrade.asp

DEFINITION of 'Cross Trade'

A practice where buy and sell orders for the same stock are offset without recording the trade on the exchange, which is outlawed on most major stock exchanges. This also occurs when a broker executes both a buy and a sell for the same security from one client account to another where both accounts are managed by the same portfolio manager.

BREAKING DOWN 'Cross Trade'

Typically, this is yet another way for a broker to rip you off. When the trade doesn't get recorded through the exchange, there is a good chance that one client didn't get the best price.

However, cross trades are permitted in very selective situations such as when both the buyer and the seller are clients of the same asset manager. The portfolio manager can effectively "swapl out" a bond or other fixed income product from one client to another and eliminate the spreads on both the bid and ask side of the trade. The broker and manager must prove a fair market price for the transaction and record the trade as a cross for proper regulatory classification.

The key point is that the asset manager must be able to prove to the SEC that the trade was beneficial to both parties before executing a cross trade.

Cheds Breakdown:
Cross trade can be a great signal during the day for entry point. A mal MM has been in the box all day (say BMAK), then all of a suddent you see a 4mil print 3 ticks below current price, but the share price doesnt change. This can be the mal MM signaling they are done and about to move back up and allow a window in the L2 for trading. This is often termed 'MM mark out"

In the below example, a 2 mil cross trade at .0055 on GDSI with share price at .0057

Here's how "cross-trades" can sometimes be bullish -- $CHIT perfect example, MM Mark out

https://twitter.com/BigCheds/status/807072423443107840