Massive Volume During Last Hour Today

While the first 4-5 hours today were fairly quiet the last 90 minutes or so saw massive volumes of preferred stocks and baby bonds trade as no doubt ETFs were doing some rebalancing while other funds may have been locking down some profits for the end of the quarter.

Many of the high volume issues traded as much as 10-30 times their normal daily volume–mostly these were bank issues.

Many of the high quality issues traded down 25-50 cents on the close. The WR Berkley subordinated note issue (WRB-B) we wrote about last week (WRB-B) which we bought for a dividend (interest) capture fell all the way to $25.08 on huge volume. If it still there in the morning I will buy more.  The issue goes ex dividend in a couple weeks.

Here is a little taste of some of the action today.

33 thoughts on “Massive Volume During Last Hour Today”

  1. Tim, Thank you for this intel. BXP-B at BBB and stripped under redemption value made it interesting. Just scooped some up at 25.17.

    1. Nice pickup Alpha.. Solid quality REIT.. Coupon rate is low (5.2.5%)..

      Got as low as $22 in December sell off but it was due to heightened credit risk..

      We own it..

  2. Teekay Offshore preferreds are jumping this morning.

    * TEEKAY OFFSHORE PARTNERS ANNOUNCES AGREEMENT FOR THE ACQUISITION OF ITS PUBLICLY HELD COMMON UNITS BY BROOKFIELD
    * TEEKAY OFFSHORE PARTNERS ANNOUNCES AGREEMENT FOR THE ACQUISITION OF ITS PUBLICLY HELD COMMON UNITS BY BROOKFIELD
    * TEEKAY OFFSHORE PARTNERS – BROOKFIELD CONSORTIUM WILL ACQUIRE PUBLICLY HELD COMMON UNITS NOT ALREADY HELD BY IT IN EXCHANGE FOR $1.55 IN CASH/UNIT
    * TEEKAY OFFSHORE PARTNERS LP – PARTNERSHIP’S OUTSTANDING PREFERRED UNITS WILL BE UNCHANGED AND REMAIN OUTSTANDING BY VIRTUE OF MERGER

  3. This just in: Charles Schwab said on Tuesday that it is ending commissions for online trading in U.S. stocks, exchange-traded funds and options.

    1. Perhaps they make enough on float, selling order flow and securities lending.

      I’m sure they’ve run the numbers.

      1. Exactly. Schwab’s new subscription service is also an interesting slight of hand. Why make 1,000’s when you can save 4.95?

        1. That is already how brokerages make money. The spread between the overnight rate they pay vs what they earn. comissions were only 8% or so of schwabs income

    2. @ Vg

      I thought you were kidding! But I checked, and it is true!

      As an aside, I have noted that sometimes Fidelity does not charge the $4.95 on trades I make. They all seem to be on preferred stocks and baby bonds. Sometimes $4.95, sometimes nothing. All of the common stock trades are charged a fee.

      1. @bob-in-de and Retired Broker

        I would have come up with something better than that if I were kidding! 🙂

        Zero commissions starts on Oct. 7. According to CNBC, Schwab only made 8% on trading revenues and wants to keep its clients from moving to platforms with zero commissions, like J.P. Morgan and others. And they probably want to attract new clients as well. After the announcement, their stock sank, however.

    3. Its hard to imagine that Fidelity (and others) won’t follow Schwab’s lead and eliminate its online commissions.

    4. Interactive brokers announced several days ago that they will be offering a “lite” account that charges no commissions on stocks, etfs, +, but will route orders to market makers who pay for flow.
      I think the schwab announcement is in response to IB

      1. You end up paying one way or the other. Its a marketing gimmick. The no-commission firms get paid for order flow so you could end up paying slightly more on fills. Now one can come out a winner if they manage their trades to take advantage of the system

        I am not worried either way. Commissions are so low to begin with it is immaterial from my perspective

        1. There may be a slight increase in hidden fees. But $5 a trade? It’s hard to imagine the hidden fees will go up an average of $5 a trade. I for one am glad to see free trades. Now I’m not reluctant to trade in small volume or for small gain.

          1. It likely depends on how many shares one trades. If you are trading just 100 or 200 at a time, then likely not. If you are trading 500 or more, it could easily be $5 or more. A 1 cent per share difference can add up on larger trades

  4. If it is a fund doing year-end re-balancing, it must be one of the big ones that has a fiscal year-end of 9/30. (and it could be more than 1)
    March 31 is PFF, so it isn’t that one, though there are others that are sizable enough to trade this many shares.
    Next question.
    Now that they sold out to get the ones above back into line for the index, which ones are they going to buy today to increase the positions to get those into alignment with the index.

      1. Definitely PFF and assuming next month will be worse. Transition will be complete end of October.

        Important Notice Regarding Change in Investment Policy – On Thursday, September 13, 2018 the iShares Trust Board of Trustees approved the change in the underlying index for the iShares Preferred and Income Securities ETF (ticker symbol: PFF). Beginning on or around Friday, November 1, 2019, the fund will track a new underlying index, the ICE Exchange-Listed Preferred & Hybrid Securities Index, and will cease to track the ICE Exchange-Listed Preferred & Hybrid Securities Transition Index. For more information, please contact 1-800-iShares (474-2737).

          1. Interesting. You could be right. But this has already been going on for 11 months. I didn’t think this was a 1-year implementation but maybe it is

            1. No, it didn’t start in 2018. They announced it then, started in feb ends in november. 6 month transition

        1. ” Transition will be complete end of October.”

          Oh no! Will be sorry to see the monthly giveaway end. 🙁

          1. I’m sure they will still rebalance every month, just probably won’t be as crazy as it has been. I’m interested to see if the end of this month brings some nice surprises as well. Maybe they got most of the nonsense out of the way already. Either way, I would never put money into PFF seeing the awful trades that are executed to stick to an index.

        1. A few questions:
          1. Did this happen last month as well?

          2. Is the price drop larger for securities trading way under par because their relative market value (since they are below par) is smaller than in relation to an equal sized issue trading close or above par?

          Also, this seems like a prime opportunity to identify the securities ahead of time for some arbitrage.

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