This is an... extraordinary article in the Wall Street Journal about stock internalization, etc.https://www.wsj.com/articles/exchanges-vie-with-ultrafast-traders-for-mom-and-pop-stock-orders-11568808000 …
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I feel like I have a strong presumption that if one is writing for the Wall Street Journal one understands how stock works, but that's a rebuttable presumption, and:pic.twitter.com/6Nl6EHZ1kK
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It's far too easy on Twitter to dunk for the sake of dunking. I'm going back and forth and trying to introspect whether I'm doing that. I don't think I am: The reason why a hedge fund wouldn't participate in later gains of Apple stock if they sold their Apple stock is trivial.
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If you sell your stock, regardless of your contra, you will not participate in future price movements of the stock. That is, presumably, a major reason why you are selling your stock.
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If you sell your stock to retail investors, and then a pension fund buys a million shares of Apple, you still won't participate in the later gain of the stock caused by the price impact of the pension fund's order. If that is a problem... you don't want to sell your Apple stock.
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Replying to @patio11
when you place large orders you can move the underlying security against you put say $20k to $50k into FNKO & the stock might move about a half-percent. picking off selling (or buying) in bits & pieces allows one to enter or exit a position without moving the market
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Yes, block orders causing price impact is one of the core challenges of trading execution. You can break your order into many orders and attempt to execute it over time; the tradeoff is that you lose execution certainty.
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