Misinformation about MicroStrategy securities is rampant on social media, and a declare about an unimaginable delay in buy orders for the corporate’s Strife (STRF) is the most recent, egregious instance.
In line with Josh Mandell, the $6 trillion asset supervisor and brokerage Constancy didn’t fill his market purchase order for STRF for over seven minutes.
Furthermore, in his doubtful view, the precise finest provide that Constancy quoted to him couldn’t be actual and, because of the ostensible delay, “is obviously higher than quoted.”
If true, the explanations for such an prolonged delay would have had extra to do with how inventory markets operate than MicroStrategy, its founder, Michael Saylor, or the corporate’s most well-liked inventory.
A market purchase is an exchange-regulated order to a dealer to right away fill a specified variety of shares at the perfect accessible costs amongst prevailing provides.
Nonetheless, exchanges solely set guidelines on the orders that brokers settle for throughout their hours of operation.
In contrast to digital asset markets, inventory markets like NasdaqGS, which lists STRF for buying and selling, don’t permit around-the-clock buying and selling.
What sort of MicroStrategy market purchase order?
If Mandell used Constancy’s retail brokerage to purchase the MicroStrategy most well-liked shares, NASDAQ would require that brokerage to fill Mandell’s conventional market purchase order throughout common buying and selling classes — usually 9:30am to 4pm New York time, Monday by way of Friday.
Many brokerages additionally settle for so-called prolonged hours market purchase orders, that are distinct from common buying and selling session orders and labeled as market purchase orders by the brokerage for comfort solely.
Throughout morning (4am to 9:30am) and night (4pm to 8pm) prolonged hours, purchase orders can fill at prevailing provides with considerably thinner liquidity, a lot wider bid/ask spreads, and no necessary market-maker tasked with orderly bids and provides.
Furthermore, some securities don’t commerce full prolonged hours classes.
Lastly, exterior of prolonged hours, exchanges don’t require brokers to fill any market purchase order by any means. Earlier than 4am, after 8pm, and on the weekends, the change is closed fully and doesn’t permit shares to transact.
That is doubtless the time throughout which Mandell positioned his order, with many individuals declaring that the timing of his submit was exterior of normal buying and selling hours.
Ultimately, he even admitted as a lot, saying, “information value of this post = ZERO.”
