VWAP Buying from Institutions

Something interesting from http://justin.cv/files/7fddc05c3bb4

When an institution gets an upgrade the PMs get the updated reports and the sell side analysts call the PMs. The PMs are like ok this is interesting lets put in a buy order of 1M shares. They route that to the execution traders and they put the order in their computer. Sometimes if there are alot of orders they might place the order over a couple days. They put the buy price at the VWAP, and get a commission if they do better than VWAP so they hand trade some, but most is just VWAP in case they don’t do as well as the algo.

So if alot of people are like I want to buy this that causes the share price to go up like 20% because along the way peoples targets might be met and they exit.