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David Schwartz
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That will cause the amount of shares the person buys or sells to correlatedcorrelate directly with how far the price has moved. If the price moves twice as much, the trader will buy or sell twice as many shares. That's rarely what anyone wants, but if there was someone who wanted that, they could accomplish it as you suggest.

If you do want to price into any movement, you could place offers like that. It's not unusual for people to place a small number of orders clustered around the current price, usually with the volume increasing as you get further from the current price. This is generally a market-making strategy that allows you to make large trades without taking huge losses if the price moves more quickly than you can move your offers.

That will cause the amount of shares the person buys or sells to correlated directly with how far the price has moved. If the price moves twice as much, the trader will buy or sell twice as many shares. That's rarely what anyone wants, but if there was someone who wanted that, they could accomplish it as you suggest.

If you do want to price into any movement, you could place offers like that. It's not unusual for people to place a small number of orders clustered around the current price, usually with the volume increasing as you get further from the current price. This is generally a market-making strategy that allows you to make large trades without taking huge losses if the price moves more quickly than you can move your offers.

That will cause the amount of shares the person buys or sells to correlate directly with how far the price has moved. If the price moves twice as much, the trader will buy or sell twice as many shares. That's rarely what anyone wants, but if there was someone who wanted that, they could accomplish it as you suggest.

If you do want to price into any movement, you could place offers like that. It's not unusual for people to place a small number of orders clustered around the current price, usually with the volume increasing as you get further from the current price. This is generally a market-making strategy that allows you to make large trades without taking huge losses if the price moves more quickly than you can move your offers.

Source Link
David Schwartz
  • 10.4k
  • 2
  • 28
  • 45

That will cause the amount of shares the person buys or sells to correlated directly with how far the price has moved. If the price moves twice as much, the trader will buy or sell twice as many shares. That's rarely what anyone wants, but if there was someone who wanted that, they could accomplish it as you suggest.

If you do want to price into any movement, you could place offers like that. It's not unusual for people to place a small number of orders clustered around the current price, usually with the volume increasing as you get further from the current price. This is generally a market-making strategy that allows you to make large trades without taking huge losses if the price moves more quickly than you can move your offers.