Let's say the current market is 400. $1.00 x $1.01.400, and then an elephant comes in and hangs a huge buy-in of 5,000 shares at $1.00, at which point the market becomes 5,400.
But if the elephant really wants to buy the stock, and the elephant may be using the Join the maker strategy, please refer to the previous post.http://tw.myblog.yahoo.com/Blue-Speculator/article?mid=3330&prev=3338&next=3320&l=f&fid=21If the elephant is not being slaughtered, then the high-frequency trader will not be satisfied with just a profit of 1 cent per share, when he can slowly kill the elephant.
The high-frequency trader's strategy is to push the market price up to $1.01 x $1.02 and then wait and see if the elephant will push their buy price up to $1.01 if the elephant buy price goes up to $1.01, which means that the elephant is likely to have adopted the join the maker strategy and also fall into the trap of the high-frequency trader.
The high-frequency trader then pushes the price further upwards, pushing it up to $1.02 x $1.03, repeat to see if the elephant's purchase price follows, and if so, continue pushing upwards. Assuming the final push to $1.03 x $1.05, at which point the elephant's purchase price has been pushed up from $1.00 to $1.03, then the high-frequency trader can dump all inventory on the elephant for a profit of 1-3 cents per share.
This is called "push the elephant" because the strategy is to attract the elephants all the way and slowly push their purchase price up by 1 cent.
However, it is also possible that a strategy like push the elephant will actually be opposed by large institutional investors, who may intentionally "disguise" themselves as elephants, post a large number of fake invoices in the market in order to ship, and then pretend to be addicted, or follow high-frequency traders who slowly raise their purchase prices step by step, and then wait for the price to rise, then in a brain dump the stock to the high-frequency traders.
When high-frequency traders have been played several times by large institutional investors and have suffered several losses, they naturally develop a set of Anti-Gaming strategies. The "opposition" strategy of these high-frequency traders is that, during the process of pulling up the price, they will occasionally sell some shares to the elephant to see if the elephant will really eat, and if it is discovered that when selling shares to the elephant, the elephant's payoff disappears, at which time high-frequency traders will know that the trader has been cheated, or they can quickly get rid of the stock in their hands and leave the game.