Gold News: GLD Has A Million-Share Minute

| May 9, 2018

In case you were sleeping Friday, or out enjoying some sunshine, the biggest single trade in GLD history crossed the wires at 1:22 PM.  For market watchers, seeing this gold news in real time was an interesting experience. A normal sleepy Friday trading in the gold world, then all of a sudden a huge volume spike, followed by another even bigger one.  That million shares translates to $124 million-plus in American money. Here’s the 1-minute chart from Friday for your reference.

SPDR Gold Shares

(credit Fidelity.com)

Any time you see something like this, you quickly check other market indices like the Dow 30 Industrials or the S&P 500 to see if something really big just happened. If those show nothing, you turn to live news to make sure nothing catastrophic happened.

On Friday, all those checks would have showed you exactly nothing.  No flash crash, no leaps or dives in the major indices, no obvious gold news of any kind. Just these two huge volume spikes in the middle of relative calm. For reference, the market for GLD generally perks along between 1,000 and 25,000 shares per minute, favoring the lower end of that range.  A 40,000 share minute doesn’t raise eyebrows unless it’s followed by several more.

This morning the news reveals the bigger of the two – the 1,009,009 share minute in GLD – was primarily 1 million shares in one trade, and hit the chart at 1:23 PM EST. Along with 9,009 other shares, which would be a normal minute.  The 1 million shares went off between 124.53 and 124.55 according to the official chart, which budged just 2 cents during that minute.

The prior minute may actually be more interesting. Just before the big one hit, we saw volume spike to 487,218 shares. That probably would have been the newsmaker but it was quickly overshadowed by the next minute. Prices in that minute fluctuated just 10 cents – still not a lot, but more than during the million share minute. Even if the chart is slightly askew – for example, if prices jumped 10 cents during the million share minute – it’s still not a big change in price considering the volume was 40 times higher or more than one would normally expect in a single minute.

Now why, might you ask, would a million-share minute not move prices much?  GLD is an ETF with a high degree of liquidity at the present time. So if a trader put in a limit order to buy or sell at a price very close to the current price, the market maker might just absorb the trade as-is.  Usually the shares-available at the bid and the ask for GLD are quite high compared to ordinary stocks, and even most ETFs. But a million shares in one gulp is quite a feat.

This Gold Enthusiast isn’t concerned about this latest gold news. Without a big price change, there just isn’t a lot to worry about here. Still, gold traders will probably be watching the market closely on Monday to see if any more trades like this go off.  If so, we might start hearing about conspiracy theories.

Signed, The Gold Enthusiast

DISCLAIMER: The author holds no positions in any mentioned security.  The author is long NUGT and JNUG and may trade those at any time over the next 48 hours.

 

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Category: Commodities

About the Author ()

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals. Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach. Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"

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