I Think We Need to Talk About “Disruptive Trading Practices”. And This is IMPORTANT!!
If you are a dumb ass (and I’m talking Community Rule #10 type of a dumb ass), stop reading here. This is too complicated to present to you in two sentences and a couple of bullet points. But for anyone who wants to make A LOT of money, this could be VERY beneficial for you.
“Disruptive Trading Practices” is a term that they use to deny you the ability to actively trade your shares the way the YOU want to trade them.
This is also a “catch-all” for them to deny your trades before they have a chance to be executed.
As of 2019, between 80% - 90% of all trades in the Market are completed through their automated flow process. That means that most trades are never looked at by a human being. And that means that as long as you submit a “normal” order, there is a very high degree of probability that you order will “flow” through to execution without any glitches. It could be higher today, but I’m too lazy to look it up so if you are concerned enough, go look it up yourselves and report back to us.
https://www.cnbc.com/2019/06/28/80percent-of-the-stock-market-is-now-on-autopilot.html
What that also means is that there is a 10% -20% chance that your order might NOT flow through the process and it might get rejected. I am already seeing and hearing a LOT of instances where our Brokers are already rejecting our orders. They don’t necessarily tell you WHY, but this right here is the reason. They CAN legally reject your orders, and you will have absolutely NO legal recourse if they cost you a LOT of money…..so this is your chance to learn something and adjust your trading practices so that you increase the probability of your orders going through…and on the first pass.
Some of you are already too smart for this. Feel free to move on. For the rest of us, I will try to cover just a handful of these and see if I can make a few pointers to help your orders to flow, and to fill, because if this thing goes live, there will be stoppages in trading, and there will be A LOT of orders at risk of being rejected. That 80% - 90% automated fill is likely going to drop considerably.
Here is the FAQ from NASDAQ that lists different Disruptive Trading Practices and I’m mostly just going to talk about a few that I think might be more likely to be rejected.
https://www.nasdaq.com/docs/98356_disruptive-trading-practices-rule-faq---4.10.15.pdf
the effect on other market participants;
the market participant’s historical pattern of activity;
the market participant’s Order entry and cancellation activity;
the size of the Order(s) relative to market conditions at the time the Order(s) was placed;
the size of the Order(s) relative to the market participant’s position and/or capitalization;
the number of Orders;
the ability of the market participant to manage the risk associated with the Order(s) if fully executed;
the duration for which the Order(s) is exposed to the market;
the duration between, and frequency of, non-actionable messages;
the queue position or priority of the Order in the Order Book;
the prices of preceding and succeeding bids, offers, and trades;
the change in the best offer price, best bid price, last sale price, or other price that results from the entry of the Order;
the market participant’s activity in related markets.
I’m only going to cover a few of these.
The first Disruptive Trading Practice is if you put in a limit order when this thing is surging hard, I would expect that your limit orders are NOT going to fill. Remember that the MM takes the difference between the Bid and the Ask as their “cut” of EVERY single trade. If both the Buyer and the Seller put in their limit orders at the mid-point, there is nothing left in that trade for the Market Maker. If the Buyer buys at the Ask, and the Seller sells at the Bid, the MM gets to keep the full spread. Which orders do you thing are going to get filled (or rejected)? Yes, filling at Market has its risks, but when a stock is moving this fast, NOT getting in (or out) is likely to be MUCH more costly than getting a slightly less-than-desirable fill. And to go along with this, if you submit your Market order and it does not fill IMMEDIATELY, consider canceling it immediately and re-submit it (or within some very reasonable, but short period of time.) Remember, if it gets routed outside the “normal” flow channel, it might just sit in a queue somewhere for the entire rest of the trading session. And you might miss out on life-changing money.
Another factor than can be looked at (to reject you) is the SIZES of your orders. If your normal order is 1 – 2 Covered CALLs and you submit an order for 5,000 naked CALLS, there is a high(er) probability that your orders could be rejected. If you DO submit an order for 5,000 contracts and if it does not fill IMMEDIATELY, cut your orders down to something smaller like 100 – 200 contracts. Just submit more of them. I have pointed out the function in ThinkorSwim that allows you to trade in multiple accounts simultaneously with a single click of the button. Learn features like this BEFORE we go live because trying to figure this out in the heat of Battle is the WRONG time to learn this function. Here is what it looks like again in ThinkorSwim. And if you are not sitting on tens of million of cash in your accounts, you could be forced to turn something into cash VERY quickly. This could be selling other positions, or maybe if you have some of your earlier CALLS that are printing (they could be up 10,000% – 30,000%), be prepared to turn some of those earlier trades into cash by closing out half of a position so you can plow that money back into your next (larger) orders. I have referred to this as my “ladder” strategy, and you can search for it in the search bar.
The last one that I’m going to address specifically is this one: the ability of the market participant to manage the risk associated with the Order(s) if fully executed;
If you put in an order for 5,000 contracts, this is 500,000 shares. Today, to buy 500,000 shares would cost you a cool $2 MIL at $4/sh. If you do not have a couple of mil sitting around, your order COULD be rejected because it is “Disruptive”. Once you get up to this size of a trade, have your plan in place to “cash out” some of your earlier trades. You probably don’t want to sell your entire first few trades. Close half of them out and if you are up 30,000% on some of your trades, there is a very high probability that you are sitting on an amount of cash that you may have never seen before. A 30,000% or a 60,000% return is something that very few people besides r/roaringkitty have ever seen before. If you are in this situation, you might be sweating bullets and hyperventilating. This is where you might benefit yourself to have some trading notes handy to look down at for a quick reference to get your marbles back in place.
The very last “disruptive” trading practice that I am already seeing is that your Broker will not allow you to put in a GTC order to sell your stock at $1,000/share. They will almost 100% determine that this is disruptive and cancel your orders. I have seen rejections for GTC for anything above $20. If you are prepared to put in a GTC at $20, be prepared to give your shares away at $20/share if we wake up in the morning and we gap-up to $25/share at the open. If this happens, you might be out of the game before the game even gets going. Just be careful with your limit orders. If you submit a limit order, the system looks for those orders to be “normal” orders and deemed “fillable”, but it is also entirely possible to blow through a limit order so fast that the system does not have time to execute your order.
If this thing goes live, once it starts moving, it is going to move REALLY fast. The MM is going to halt trading many times. You saw the BS they pulled on GME back in 2021. EXPECT these halts, and use them as a chance to reset yourselves. Don’t bother going to use the restroom during these halts, just piss yourselves. Using the restroom could cost you a LOT of money. I’m just kidding of course but when we do get halts in the trading, use this time wisely, and to your advantage to get ready for when trading resumes. Go through all of your orders when the trading is halted and make sure that when trading starts back up, that you are ready to submit, or re-submit order….and again, don’t be afraid to make some notes for yourselves.
I know that some of you are so smart that you already know all of this. Appease the rest of us Dummies and let us work through this in the comment section.
If you are a disruptive force, I have been known to re-rout people outside of the r/Wolfspeed_Stonk Community (Community Rules #6, #10 & #12.)
None of us has any idea if we are going to see a short squeeze. All I’m saying is to be ready in the event it happens.
Fail to plan, plan to fail….
And GO, GO, GO Wolfspeed.
Posted Apr 29, 2025, 8:46 AM UTC