I own a few shares of SGDJ that normally trade around $35. Yet the quotes now (market not yet open today, but some trading is going on) are
Bid $15.00 Ask $14,872.40.
For the last few days, they have been like this (though the Ask varies from day-to-day). During the times the market is open, the numbers are “correct.” Do real people make bids and asks like that, or is it some algorithmic computer system doing it? It is my understanding you can enter only limit orders out of hours, so they won’t catch someone who places an out of hours market order and zap him for $14,872. So why are they doing it?
I have no idea what those ask/bid numbers are based on. They certainly look like they come from left field. One of the explanations I’ve read is that after hours trading generally has such low volume that the disparity between bid/ask pricing becomes exaggerated. What is clear is that it is not a reflection of the true market value of the company’s stock.
Who notes it is usually not an individual placing orders that fuel the ask prices but computer trading systems that are simply responding to quantitative inputs and not any conscious decision making…
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