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Friday, December 10, 2010

Large Positions

Margin callers with large position must exit in an uptrend when there is liquidity, not in a downtrend and no liquidity. I suggest you do not exit on due date otherwise, you will get a barat bid. What i observed in the past few days,( I think this is only one trader since the volume figure did not change.) Nobody will buy your offer in a down trend.

Example Only.
10:00 hrs
Bid Volume     Price       Your offer volume   price
10,000            100.0        175,000                 120.0

10:15 hrs
Bid Volume     Price       Your offer volume   price
10,000            90.0        175,000                 100.0


10:30 hrs
Bid Volume     Price       Your offer volume   price
10,000            80.0        175,000                 90.0


At the end of the trading day I will not be surprise it would drop to 60.0


Better, sell in the market in increments, like when you see a bid 10,000 @ 100 pesos. sell, it, at least, you are not shooting your own foot. Then wait, if you see another 10,000 @  10K at 98, sell it. If you see only 1K at 100 sell it and so on until you have liquidated your 175K.

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