One second of trading on Dec. 5 provides a stark example of how frenetic trading can be in today’s high-octane computer-fueled stock market.
Earnings for the Bolingbrook, Ill., company were due to be released after the closing bell at 4 p.m. Eastern. At about 3:48 p.m., the trader issued an order to sell 26,000 shares of Ulta stock, according to people familiar with the trading.
Instead of selling the stock at the current market price, the trader decided to sell it at the price it fetched at the close of trading, a common strategy fund managers employ when selling big blocks of stock. The heavy trading that typically accompanies the close can minimize the impact of a big trade on the price of the stock.
At 4 p.m., Ulta’s stock was changing hands for about $122 a share.
About 150 milliseconds after 4 p.m., Business Wire released Ulta’s earnings, according to people familiar with the timing of the release. The earnings results missed analyst expectations, a sign for traders to sell.
Within about 50 milliseconds, in a series of rapid-fire trades, about 6,200 shares of Ulta’s stock were sold on New York stock exchanges for nearly $122, totaling nearly $800,000.
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