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Author: yodaorange Big red star, 1000 posts Feste Award Nominee! Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 77491  
Subject: Meltup in BIR-pA Date: 5/3/2013 8:22 PM
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I have not posted about it before, but BIR-pA is consistently showing up with very thin trading. Today was a good example. Here is the sequence

9:51:52 100 shares @29.50
9:51:52 2000 shares @32.00
9:51:52 200 shares @32.01
9:51:52 490 shares @32.01
9:53:38 100 shares @29.78

Apparently someone placed a market order to buy 3,500 shares. All of these shares traded at the exact same second. This order "blew through" all of the reasonably priced sell orders. It ran into the "stub quotes" that brokers place that are never supposed to be "hit." This buyer got 200 shares at about the right price, but paid about $2.50 too much for the other 3,300 shares. Works out to overpaying about $8,250. All of the high price shares were traded on a "dark pool."

What MIGHT be significant is that this issue trades on the American Exchange. Nearly all other preferreds trade on the NYSE. The three GOOD-p* preferreds with strange patterns trade on the NASDAQ.

In this case, if it traded on the NYSE, the "market maker" algorithm that runs on a computer, MIGHT have stepped in and sold the shares at a lower price. This would be part of the "maintain an orderly" market mandate.

BOTTOM LINES:

1) If you currently own BIR-pA, you might sell them for a way above normal prices. I would have a standing sell order.

2) FRIENDS DON'T LET FRIENDS BUY/SELL REIT PREFERREDS WITH MARKET ORDERS!

Thanks,

Yodaorange
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