posted
So then how do we interact with market makers? I'm assuming when looking at Level 2 quotes all the displayed buyers and sellers, such as NITE, are the market making firms. Do we follow their plays to see what the rest of the individual investors in the world are doing? Simply, they do what we want them to do so if a ton of people are buying one thing then the market makers have to also buy that stock. Is this right?
Dardadog says he doesn't follow MM's but can he say he has ever done the opposite of what they're doing? I'm saying that it's almost impossible for a stock to fall in price if there are more buyers. So for Dardadog's picks to rise the MM's can't be selling their shares.
Lastly, Dardadog mentioned in one of his posts that he heard otccharts has an option that shows where market markers are focusing but he never looked into where that option is. Does anyone else know where that is? Matt
Ric
posted
Well thats good questions that a lot may not know because it is assumed that MM have some power that they may or may not have. Level II only show MM and where they are at on bid and ask. I am sure that all of us would like the answers to your questions. MM's have been fined for shorting and on some pennies it is believed they heavily short. Is it true? I assume partly, but who knows to what extent. The assumption is they do some manipulation by moving stocks up and down in price by trading between themselves. They also can short sell stocks that you or me can't. A stock must be a marketable security for you or me to short but a MM shorts any stock because they are the middle man. When you buy any pink or OTC and Nasdaq, your broker goes to a MM to buy or sell your stock. Wheather you call the big boards trading, MM's or third party brokers, it all tends to work the same way.
I guess the answer is that if you could follow MM's that everyone would do it. The market has the biggest influence not the MM's. They can sway it a little but to what extent they only know.
Ric
[This message has been edited by Ric (edited October 26, 2004).]
salemm
posted
I've seen posts where people mention that MMs have access to LevelIII or L3 which gives them sight of what's happening wayyyyyy before we find out on level II. Can anyone confirm this? salemm.
Spinoff
posted
MM's are the sludge found at a toxic waste dump
glassman
posted
they melt in your mouth not in your hand...
they sponsor Elliot Sadler in Nascar
and they look really nasty if they fall between the cushions of your couch and fester for a few months...LOL
a4realguy
posted
Will the fully electronic system where we buy directly at prices posted within 9 seconds of our bid eliminate the MM'S?
Bob Frey
posted
The Market Maker the ECN and the NYSE's specialist.
All are supposed to work the same way. They are to represent the market ( What the traders or investors want to do at a given point in time. ) Problem is that the only one that does it all the time is the ECN’s.
The human factor in the Market Maker world and Specialist world is where it can get foggy especially in fast markets. How does it get foggy?
They will post both buys and sells. This will double the volume count for trades and unit volume.
They will not post the best offer or best sell prices. The best refers to the lowest or best sell price offered by a seller and or the best buy price offered buy a buyer. This very prominent in the pinks and other otcbb issues.
Forgot the name of the stock I did it with but a few years back I noticed a NYSE stock with a .30 spread between the posted bid and ask. I offered a nickel more than the bid and within seconds it was posted as the best bid. I got filled in the next few minutes. We then turned around and made an offer to sell at a nickel less than the best offer. Within seconds I was on the ask and it filled for a $ 0.20 profit. I think I did it about 5 or 6 times in one day. Finally the specialist closed the gap to .o5 so I could no longer make the market.
These human interventions in your stock or trading and investing is totally a scam in my opinion. They were created to maintain a more orderly market for stocks. They use the “more orderly” job description to pocket your money by creating false markets when they do not post the best bid and or ask for any issue.
posted