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I am looking at this stock BKCC and was shocked at one point at its price of only $0.97. Just within 1 hour of opening, BKCC traded between $0.97 and $9.5.

How can this be so, particularly when it is actually quite liquid? The market cap is $6b. Not a penny stock prone to manipulation. Can someone explain? I am shell-shocked.

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18

EDIT: It was System Disruption or Malfunctions

August 24, 2015 2:12 PM EDT
Pursuant to Rule 11890(b) NASDAQ, on its own motion, in conjunction with BATS, and FINRA has determined to cancel all trades in security Blackrock Capital Investment. (Nasdaq: BKCC) at or below $5.86 that were executed in NASDAQ between 09:38:00 and 09:46:00 ET. This decision cannot be appealed. NASDAQ will be canceling trades on the participants behalf.

A person on Reddit claimed that he was the buyer. He used Robinhood, a $0 commission broker and start-up.

The canceled trades are reflected on CTA/UTP and the current charts will differ from the one posted below.

It is an undesired effect of the 5-minute Trading Halt.

It is not "within 1 hour of opening, BKCC traded between $0.97 and $9.5".

Those trades only occurred for a few seconds on two occasions.

One possible reason is that when the trading halt ended, there was a lot of Market Order to sell accumulated.

Refer to the following chart, where each candle represents a 10 second period. As you can see, the low prices did not "sustain" for hours.

Chart

And the published halts.

Halts

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  • So the volume traded at the abnormally low price was 90-some k, representing less than a million dollars in losses to the seller(s). They've probably had worse days. – Steve Jessop Aug 24 '15 at 18:03
  • @base64 - Nice chart and explanation. Isn't there an implication this is a result of a market order? If every owner simply had orders in place, say no lower than $8, that odd dramatic drop wouldn't have occurred. – JoeTaxpayer♦ Aug 24 '15 at 19:34
  • @JoeTaxpayer Without subscribing to Historical Order Book data such as NASDAQ Market Replay PLUS, I cannot tell the exact cause. It could be everybody's stop loss being triggered; it could be market maker withdrawing. I am not familiar with how the opening price of a resumption is determined (opening cross auction vs price-time priority). nasdaqtrader.com/content/ProductsServices/Trading/IPOHalt/… – base64 Aug 24 '15 at 19:50
  • I saw the edit. Nice work. Still, even though wrong, I like my answer, too. – JoeTaxpayer♦ Aug 25 '15 at 1:23
  • A follow-up question was asked in response to your answer. Thanks. Good answer. money.stackexchange.com/questions/52292/… – curious Aug 25 '15 at 7:09
8

As you know, the market is in turmoil today. At this moment, 11:45 am, the S&P is down 2.3%, 45 points. But, premarket, it was down 100 points.

Now, premarket, I heard Jim Cramer say, "today is not the day to use market orders." Yes, on Mad Money, he seems a bit eccentric, but he does offer some wise advice at times.

In my opinion, your stock had some people that did just that. A market order. And, regardless of the fundamentals of this company, buyers had no orders to buy. Except a couple wise guys (in both senses) that put in buys at crazy prices. And they filled.

With an Apple, trading around $100, the book probably has millions of shares on order with a buy at $80 or higher. Just an example. I'd bet there were a number of stocks that had the profile of yours, i.e. a chart reflecting trades similar to a flash crash. There are some traders smiling ear to ear, and some crying in their beer.

(Note - I use the phrase "in my opinion." This is the only explanation I can imagine. Occam's Razor.)

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