What is the general purpose of a trader combining two stocks together in the trading...
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What is the general purpose of a trader combining two stocks together in the trading negotiation, when he/she actually wants to trade one of the two stocks? For example, the trader in T Rowe Price traded both the Tandem stock and the Avantek stock with Goldman Sachs but what he initially wanted to trade was only Avantek.
I. It is a sweetener to give market maker more trading volume and trading options. For example, it may help market maker get rid of some stocks (such as Tandem) in the market makers inventory
II. Distort the transaction price of one stock such as Avantek by shifting some transaction costs to another stock such as Tandem (e.g., Tape Dancing)
| I only | ||
| II only | ||
| Neither I nor II is correct. Greg at T Rowe Price did not have a purpose when combining two stocks together. | ||
| I and II |
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