Here Is A Little Scenario

Lagg-Alot said: "I Sell Short a stock yesterday and it continues to go lower to close -$1.30 with over 4 mil volume. Today the stock gains + $1.30 on 2 mil volume, but after the close I can see in the level II window after hours sales of 86,000 shares, 54,000 shares, 33,000 (really large selling). The price goes much lower in after hours trading and I am back into the black. My questions: 1) Can I assume that the large sales are instutional selling? 2) Can I take these large sales as a good sign for my short position?"

Rickster said: "It depends on how long it was after the close. It is common to see large prints after the close as they clean up their books. The actual trades could have been made at almost any time earlier in the day because they are allowed to delay reporting of block trades. Block trades are where a large order is filled a little at a time. If you watch the L2 closely on a stock with a lot of volume, you will sometimes see stutters in the print flow. Those stutters are missing prints that will be reported later as part of a block trade. When the block is reported, you will see a large print that will commonly be outside the bid/ask. Sometimes the stock will jump one way or the other after the block prints because once the big order is out of the way, the stock is free to move again. The print you are seeing after the close could have been a block that got filled in the end of the day rush, or it could have been a block that got filled earlier in the day. Technically, they have a time limit (20 minutes?), but sometimes they "forget" or misplace the order record........ If it was a half an hour after the close, it might be real. One way to get an idea of whether it was real time or not is to compare the trade price with the current bid/ask. It the print is out of whack with the current bid ask, it is almost certainly just a delayed print."

thezster said: "[QUOTE=Rickster]It depends on how long it was after the close. It is common to see large prints after the close as they clean up their books. The actual trades could have been made at almost any time earlier in the day because they are allowed to delay reporting of block trades. Block trades are where a large order is filled a little at a time. If you watch the L2 closely on a stock with a lot of volume, you will sometimes see stutters in the print flow. Those stutters are missing prints that will be reported later as part of a block trade. When the block is reported, you will see a large print that will commonly be outside the bid/ask. Sometimes the stock will jump one way or the other after the block prints because once the big order is out of the way, the stock is free to move again. The print you are seeing after the close could have been a block that got filled in the end of the day rush, or it could have been a block that got filled earlier in the day. Technically, they have a time limit (20 minutes?), but sometimes they "forget" or misplace the order record........ If it was a half an hour after the close, it might be real. One way to get an idea of whether it was real time or not is to compare the trade price with the current bid/ask. It the print is out of whack with the current bid ask, it is almost certainly just a delayed print.[/QUOTE] You're good.... really good... Nice explanation"

Lagg-Alot said: "Got it. Thanx."