First off, you can’t sell huge volume at one price. You can’t even sell a moderate volume at one price. That price only exists for a small quantity...you just take it for granted that you can sell Google at the quoted price because you’re moving such insignificant size.
The second someone tries to move real size, they’ll have to start paying down into lower bids. On top of that, if they’re anything significant, bids will cancel. That means they’ll be selling at bad prices.
There’s an entire category of counter-trend traders who make their living solely on taking the other side of a bad buy/sale. My job consists of doing that in US Treasury & Eurodollar spreads every night. Every night we see guys trying to bully the market. They push a trade down, we start buying, and if they’re big enough they might make us take some heat.
But they eventually have to buy their stuff back...and their fighting all the traders who see such a cheap deal and hop on it. The more they sell to try to force it down, the more they have to buy back. Occasionally we get smoked if the guy can push it far enough, but meanwhile we take money out every single day based on people pushing trades out of line. When you distort the market, the market takes notice and corrects.
The only way the guy who’s selling (or buying...but you don’t hear people complain about “naked longs”) can make money is if it’s a LEGITIMATE move. IE, the market is wrong and he’s right...so if you’re the genius who identifies that Enron is worth pennies on the dollar (or that Microsoft is worth a thousand times its IPO), then you SHOULD make a killing because the market price is wrong and SHOULD be that much lower (or higher).
TANSTAAFL applies, as always.
*their —> they’re (3:30AM...this makes me cringe. Really wish we could edit posts)
Would you care if Vitol was a vehicle for massive Russian speculation to jam the oil price higher? Somehow in this oil bubble there are Russians and Iranians forcing oil/energy higher and higher via the commodity markets.
Now why would they be doing this?
Would a country that brutally invades Georgia over a competitors oil pipelines be capable of such dastardly deeds?
The second someone tries to move real size, they’ll have to start paying down into lower bids. On top of that, if they’re anything significant, bids will cancel. That means they’ll be selling at bad prices.
Wow
It sure sucks to be a large speculator
Why don't you tell the to Vitol
And tell it to Goldman Sacks who agitated until the rule was altered in 1992 to allow them to take outsized positions too, not just firms involved directly in oil/commodities who needed to do some honest hedging
Please wake up. Ordinary speculation, no problem. It is not, repeat not, the only thing actually occuring at this time.