21 Jul, 2009

HFT Alert -CIT

CIT had some awful news out this morning.  The stock was halted right after the opening and once reopened it tanked almost 50%.  But then a magical thing happened, the stock traded back to $1 from a low of $0.75.  What is so magical about $1?  Any stock that trades under $1 is not eligible for a liquidty rebate from the exchanges/ecn’s.  The cost to trade sub $1 stocks is FREE but you don’t get the rebate.  But if the stock gets over $1, the the liquidity rebates which could be as high as $.003/share kick in.  So, it appears that the high frequency traders will be desperate to keep this stock above $1 today so they can keep collecting those rebates.

This entry was written by jsaluzzi, posted on July 21, 2009 at 10:42 am, filed under Uncategorized. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Post a comment or leave a trackback: Trackback URL.

3 Trackbacks

  1. By GM Share Redux: Why Is CIT Trading Near $1? - MarketBeat - WSJ on July 21, 2009 at 3:29 pm

    [...] Saluzzi of Themis Trading LLC blames it on high-frequency traders. “The stock traded back to $1 from a low of $0.75. What is so [...]

  2. By TheTradingReport » Blog Archive » GM Share Redux: Why Is CIT Trading Near $1? on July 21, 2009 at 4:15 pm

    [...] Saluzzi of Themis Trading LLC blames it on high-frequency traders. “The stock traded back to $1 from a low of $0.75. What is so [...]

  3. By TheTradingReport » Blog Archive » High-Frequency Trading Is Not A Scandal on July 28, 2009 at 9:31 am

    [...] I’m on the topic, let me debunk a few more of Themis’s blog posts. Saluzzi’s assertion that high frequency traders were manipulating the price of CIT higher so that it would be eligible [...]

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