# Can you explain this trading pattern?



## GoldStone (Mar 6, 2011)

Here's a Google Finance chart of Capital Power Corporation (TSE:CPX) for the last two days, Mon Oct 29 and Tue Oct 30.

*chart*

The same pattern of trading repeated both days:
- low volume throughout the day (as expected because of hurricane)
- right before close, someone dumps 25K shares, takes out a bunch of bids, and stock drops like a stone

If you want to dump shares but liquidity is not there, why wait until the last minute?

If someone is trying to take advantage of low liquidity, what is their game plan? I don't get it.


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## lonewolf (Jun 12, 2012)

Could have been a lot of reasons. I know when I make a trade based on cycles I will have a precise date to sell on & often it will be based to sell near as possible to the close come hell or high water. The reason being that is when the data indicates to sell.


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## HaroldCrump (Jun 10, 2009)

GoldStone said:


> - low volume throughout the day (as expected because of hurricane)
> - right before close, someone dumps 25K shares, takes out a bunch of bids, and stock drops like a stone


Yup, this is typical dumping technique.

Could be several possibilities:
- Some large investor (institution, hedge fund, etc.) getting out of its position. They are dumping in lots of 25K.
- Some HFT or prop trading program trying to be clever
- Company itself trying to manipulate price lower, perhaps to secure some PP or bought deal.

Does the company have a currently active normal course issuer bid (i.e. buyback)?


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## Hawkdog (Oct 26, 2012)

Is there any truth to large investors dumping their dogs at the end of the quarter - to make their books look cleaner?


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## HaroldCrump (Jun 10, 2009)

That usually applies to end of year selling known as tax loss selling.


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