can someone please help me explain the MM's role in the stocks market. i see lot's of people talking about MM is waiting now or MM is tring to lower the price so later can sell it at a higher price.. or mm is tryign to fight the shorts... what do i need to know about the MM?
posted
in general the real movers of markets are institutionals and Mutual Funds. MM's are there to provide liquidity and a fair and orderly market. this applies to NYSE, AMEX and NASDAQ stocks. Pennies (pinks' and BB) are driven by hype and by people like are on this board. I would guess in reality the MM's aren't there to screw you as eveyone says. its the companies themselves who keep issuing billions of shares that screw eveyone. hype makes it to every chat board, everyone buys and the company in the meanwhile is issuing billions of shares because they actually have almost 0 chance of making it as a legitimate business but they can raise more cash. that and hype make the Pink's and BB. the MM's are trying to make money just like you. if you worry about MM's then you've totally missed the idea of trading and investing.
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posted
im simpler terms.. they are broker-dealers.. they make the market so to speak... they trade for their own accounts and for clients accounts.. they are mainly on Nasdaq while the "Specialists" run a orderly market on NYSE and other major exchanges.. Specialists are somewhat different from Market Makers on Nasdaq..
-------------------- Let the world change you... And you can change the world.
posted
I thought you said you were a Market Maker? ... i don't remember you saying you were a specialist... <shrugs> .. anyways they are different because in Nasdaq there is several market makers for any One stock.. while in the NYSE there is one specialist for each stock..... one person directs the order flow ... so in NYSE it makes it more difficult to see what the intentions on a specialist are while on Nasdaq because there is so many Market Makers in each stock .. the stock and MM's become Transparent... so with MM's you can watch their movements, predict their motivation and try to trade with or shadow their moves.. that is something you cannot do with the Specialist system because of only one specialist per stock...
-------------------- Let the world change you... And you can change the world.
posted
i was a specialist on a few regional exchanges (those were the good ole days). i might have said MM at some point, but i don't really consider them different. the basic function is the same but i know what you mean.
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