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I'm very confused. Looking at the "depth" page for a company on the DB site it said that there are about 15000 shares available for a particular price, we'll say $2.50. Someone comes in and trades 200000 shares but the price didn't move...don't understand this at all. Any suggestions?? :confused:
Also, these large trades have the letters SP next to them which means "off market", what does this mean??
wbosher
Off market transaction relates to a transaction which occurs outside a formal market e.g. transactions in unlisted securities or transactions involving listed shares which were not executed on a stock exchange. Off market transactions are conducted through negotiation rather than an "auction" system.
These often occur between institutions with large parcels to sell/buy, here the deal is negotiated by brokers outside the auction system therefore do not show in depth.
It is not necessary for anyone to sell shares through a broker or the auction system, if I have a private customer I simply fill in an off market transaction form, get the parties to sign it, have the signatures witnessed and send it to the share registry and the deal is registered, this is OK for NZX and issuer sponsored on ASX but different for CHESS.
Thanks for that, but I still don't understand why these large transactions don't seem to affect the share price. I would think that if someone bought or sold 200,000 shares, the price would move accordingly. The specific stock I'm looking at is TEL.
Checking the records it looks like most off-market transactions are usually priced very close to the market so it shouldn't move it too much if at all.
Hypothetical example...the asking price is $2.50 (quantity 10,000) and next on the list is $2.55 (quantity 5,000), the Bid is $2.45. If someone buys 12,000 shares they shoud get 10,000 @ $2.50 and 2000 at $2.55. This should raise the asking price up to $2.55, am I right?? (please correct me if I'm wrong)
I have noticed that in some cases, someone comes in and trades 200,000 shares and the Bid and Ask price doesn't change at all, I don't understand why/how this happens.
I hope that clarifies my original question as I have just re-read it and it is very vague. :o
Simply because it is an off market transaction. Neither the buyer nor the seller were in the buyers list or the sellers list. Just the transaction is recorded as a sale and notated as an off market sale. It is not something to be concerned about. When I moved all my shares into a trust they all went through as off market transactions. The value of the transaction is on the share transfer form. This, I figure, is passed to the NZX by the share registry.
Thanks, got it now. :D