Quote:
Originally Posted by trader220
Just out of curiosity how is it that you think “Wall Street” manipulates a stock like AAPL ?
AAPL trades on somewhere in the area of 20 different platforms obviously most notable the NASDAQ. On the NASDAQ alone there are north of 100 firms who make markets in AAPL. There are also hundreds of other firms who are liquidity providers and obviously thousands of firms who trade it on an institutional basis. On the options side: The May 1st expiration is a “weekly” so the OI in them is tiny compared to the standard expiration. There are also dozens of firms who make markets in the options and hundreds more who are liquidity providers in the options. They all take both sides of the market.
So how do those thousands of liquidity providers, all with different interests work in concert to manipulate a stock like AAPL which trades somewhere in the area of 50 million shares a day? Why would they when the open interest in the near the money “weekly” options don’t have huge OI?
By the way. At the close before earnings the stock was roughly 131. Over the last couple days you could have covered any call you sold for pennys on the dollar even before the stock sold off. Implied volatility collapsed (as it should) after earnings. So, if you were a "Wall Strret" firm and you were short a boat load of those calls you could have easily covered for a nice win and not traded a single share of stock. Of course the firms who were short those calls I will guarantee you were also long stock or other calls as a hedge. No one, well let me rephrase that, no one who lasts very long, shorts naked options into earnings.
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Example and sign of manipulation:
The Wall Street Journal comes out with two articles today about Apple.
The first article is that Apple may owe back taxes to the EU due to their tax agreement with Ireland. WSJ states that Apple disclosed this in their earnings filing. What WSJ did not state is that the same disclosure was made in October 2014 with Apple's previous filing. The information is irrelevant and 6 months old.
The second article is that Apple had a defective supplier of tactic engines in their watches and had to solely rely on a second supplier. Beyond the headline is that none of the defect watches were sold. Again, this information was known a few months ago and is irrelevant.
I do agree that there are a lot of firms that buy and sell Nasdaq stocks. That does not mean that the stock cannot be manipulated by a few firms working together. The main firms know the stock algorithims that cause other firms to buy or sell stocks and manipulate those othe firms to their advantage to cause the sotck price to rise or fall as desired.