Manipulation In CIT Group (CIT) Trading? Say It Ain't So

Themis Trading's Joe Saluzzi thinks there could be some manipulation going on in CIT Group, Inc. (NYSE: CIT) today and issued a 'High Frequency Trading Alert' on the stock:

Here is what Joe said, "CIT had some awful news out this morning. The stock was halted right after the opening and once reopened it tanked almost 50%. But then a magical thing happened, the stock traded back to $1 from a low of $0.75. What is so magical about $1? Any stock that trades under $1 is not eligible for a liquidity rebate from the exchanges/ecn's. The cost to trade sub $1 stocks is FREE but you don't get the rebate. But if the stock gets over $1, the the liquidity rebates which could be as high as $.003/share kick in. So, it appears that the high frequency traders will be desperate to keep this stock above $1 today so they can keep collecting those rebates. There is no fundamental valuation for $1, it is simply a matter of high frequency economics.

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