I stumbled upon this observation that in the trading of certain thinly traded stocks, you will see this one broker (say Broker A) switching between Ask and Cancel order within seconds, and it just goes on and on and each ask price is lower then the previous one, eventually driving the price down. This is obvisouly algorithm trading at work, but I am just wondering what could have caused this avanlache of ask/cancel orders? There was virtually no bids the whole time, and what triggered the ask/cancel pair is that another Broker, Broker B, entered a large ask order at the beginning. (this almost sounds exactly like the May 6th event).So waht happened looks like this :Sequence Broker Order Order price Quantity1 A Ask 1.00 1002 B Ask 1.50 10,0003 A Ask 0.98 100 <==Ask/Cancel pair starts here4 A Cancel 0.98 1005 A Ask 0.96 1006 A Cancel 0.96 1007 A Ask 0.94 1008 A Cancel 0.94 100........Any insights?

Sounds like a reverse auction.

A is leaning on B. Anyone who posts a large limit order is sharing free information. It is like the market will skewed, or like you own a call option. And this market either has invisible buy orders, or buyers who do not want to give away free information to be leaned on. You can't lean on what you can't see.

QuoteOriginally posted by: outrunI would re-verse engineer that algo's triggers, build an contra-algo that fits like glove, a and puppeteer it to bankruptcyMy boss is a big buyer. He is afraid other buyers might come along, but I told him be patient. If I play this little drama over and over enough times, eventually another buyer will come along and show a large sell limit. Then you can buy from him, and be done.

QuoteOriginally posted by: outrunIt was inserting canceling the same order (same price) every 100ms for about 30 seconds.That was me calibrating my lead time on market orders.

QuoteOriginally posted by: outrunmarket orders are good! A week ago somebody sold a stock that was trading 60.00 in the previous hour at 0.01You must have made a huge profit selling at 61. That's where I covered my short from .01. Then my boy over at Nasdaq canceled the short for me, and I sold it again at 80. Where did you buy again?

QuoteOriginally posted by: outrunthat was a true story (maybe you having a boy at Nasdaq too)My boy Andrew is eager to earn is way back onto the buy side.

QuoteOriginally posted by: outrun Yes, A is leaning on BA is trying to sell and go short because A can always cover his short (hahaha not always!) by buying from BThe algo is seaching for buyers. By lowering the price it is testing hidden limit buy orders. It's a cat and mouse game though. I would re-verse engineer that algo's triggers, build an contra-algo that fits like glove, a and puppeteer it to bankruptcyIt's not clear that A can lean on B effectively in this case. Sounds like B sends an order 50% away from the current midpoint trying to provide liquidity for buyers of this pinksheet (pardon my french). In this case A's piggy backing will have little effect