I use to set an ask in after hours , especially if there weren't a bunch of trade in front of me in light volume issues, that would be 10% or so above the close. Once in awhile I catch a few rookies. I did this once with a bio-tech that was supposed to get an FDA letter the next morning regarding a drug they had submitted. A buddy I use to trade with called me and told me his shares got hit ( he was about 5% above the close), then half of mine were taken at 10% above the close. So I watched totalview and saw bids being flashed for 5 and 10k blocks, they didn't take the other half of my shares, so I lowered my ask to 7% above the close, sure enough, they were gobbled up. Before you knew it, afterhours was buzzing in this relatively small stock. Retail saw the actions and figured there was a leak and the FDA letter would be an approval. Before you knew it, the issue was trading solidly 10% higher in AH, but those 5-10k bids kept flashing on and off, they didn't hold for more then a few seconds and then disappeared.
The next morning the FDA letter came in, basically it wasn't a rejection, but said they needed more clinical data trials and the stock fell 50% that morning. There was a leak alright, but smart money wasn't there to buy, they were there to sell and the frenzy they created by hitting a few thousand shares at 5-10% above the close along with the phantom bids got retail going nuts buying up any offer. This was before algos were as prevelent as they are today so things didn't happen as fast, but anomalies in after hours always make me suspicious.
Any way, here's what we look like in the market right now.
SPY 5 min
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