Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t...
by candiodari on Saturday November 04, 2017 @05:04AM
(#15624304)
I think you'll find limit orders limit the price while they're executing. Say I place a $10 million MSFT limit buy order at $80, that means that until my $10 million is used up (the order is "filled") the price cannot drop below $80.
Conversely if I place a $1B sell order for $1100 (ought to be close to what happened here) the price cannot rise above $1100 until that amount of money has been extracted out of the market.
Market Orders soak up all the liquidity as they need to be executed at the best price available. So, if the price is at $10 and I dump a huge amount of shares, it will go through the bids..$10, $9.9, $9.8...you get the idea.
Limit Orders kind of provide liquidity. It doesn't execute unless a certain condition is met. So I can dump a large sell at $10, it won't change the price. Anyone in the market can bid into $10 and buy shares if they want.
So, trading volume doesn't matter, order type matters. If Bezos had dumped his shares in open market it would cause the price to change dramatically. People will take it as a sign and jump out like rats fleeing a sinking ship.
Most of these trades are pre-planned and are limit orders.
The data has not been updated for the November sells you can see all the Amazon insider trades here (including the March selling noted in the article): http://www.nasdaq.com/symbol/amzn/insider-trades
Most are automatic sell and are pre planned. Disposition are trades which are off market transaction, selling or buying, directly with the company.