Good traders can sense that. Also when you buy a stock warrant on an illiquid stock, you need to take into account that your own dynamic hedging, added to that of other dynamic hedgers, will reduce the volatility and stabilize the stock. I was obsessed with price formation. I couldn't understand from the screen how prices were determined. It took me six months to be able to read prices in the pit.
Locals basically read information from the order flow and squeezed the weak party.
There's always a pack of five or six dominating locals who abruptly change the prices, who bid a lot higher than the previous offer and have the guts to do it, and the rest of them follow. I learned more about market dynamics in my second six months than from years on a desk. Markets move from squeezes to squeezes. Traders make money on stop losses and other free options. It made me interested with information economics.