Let's say a Nasdaq stock is trading at $50...
Can a very large (outstanding) BUY LIMIT order at $2.00 pull the stock price down?
Is this a legal/common practice? (I've noticed this being done when reviewing Level II data)?
I see some interesting information. I guess I mis-attributed the cause of the price move..
Here is the full list of observations (since it could helpful)
- low volume
- market just closed
- 30 (x100 shares) SELL LIMIT orders @ $11.30
- 15 (x100 shares) BUY LIMIT orders @ $11.10
Actions that created a price drop:
- 10 (x100 shares) BUY LIMIT orders get moved down to $8.00
- 15 (x100 shares) SELL LIMIT orders immediately move down to $11.12 (before the next candle even forms)
- Remaining 15 (x100 shares) SELL LIMIT orders also immediately move down to $11.22 (before the next candle forms)
- Next candle shows a price drop to ~$11.12 (can't remember exact price)
- 10 (x100 shares) BUY LIMIT immediately moves up to sell at ~$11.12