MarketMaker ein must read für alle OTC und pinkis
Verfügbare Informationen zu "MarketMaker ein must read für alle OTC und pinkis"

  • Qualität des Beitrags: 0 Sterne
  • Beteiligte Poster: waxweazle
  • Forum:
  • Forenbeschreibung: Aktien Finanzen Trading Talk
  • aus dem Unterforum: Wissen für Anleger
  • Antworten: 1
  • Forum gestartet am: Freitag 11.08.2006
  • Sprache: deutsch
  • Link zum Originaltopic: MarketMaker ein must read für alle OTC und pinkis
  • Letzte Antwort: vor 16 Jahren, 10 Monaten, 29 Tagen, 22 Stunden, 15 Minuten
  • Alle Beiträge und Antworten zu "MarketMaker ein must read für alle OTC und pinkis"

    Re: MarketMaker ein must read für alle OTC und pinkis

    waxweazle - 19.06.2007, 09:28

    MarketMaker ein must read für alle OTC und pinkis
    Market Maker Speaks Out: Ways of a Market Maker

    I was an OTC MM for about 10 years ending in the late 80's. Since then I have been strictly an investor. Since I have not been that up to date in MM rules I will only make statements that I feel fairly confident are still accurate regarding these activities. By and large most MM don't have a clue nor do they care to learn, about the fundamentals of the stocks they trade.

    They just try to make orderly markets. When dealing with BB stocks it is very easy for a MM to get trapped into being short in dealing in a fast moving market. Reason being; most of the MM's in this stock are what are called "wholesalers" this means they don't have retail brokers "working" the stocks.

    So they have to rely on what's known as the "call" from larger retail houses. If a "Big" retail firm like an E-trade calls
    up a market maker to purchase say 5,000 shares of a stock, they expect to get an "execution" from that market maker. If he turns them down, or only gives a partial then the "Big" firm will go to another MM.

    If this second MM "fills the order" then that "Big" firm has a moral obligation to continue to give future "business" in
    that stock to that MM who performed (his life blood). This will go on until he "fails" to perform and so on.

    Contrary to popular opinion the "Big" firms Do NOT necessarily go to the "Low Offer" to fill a buy order (Or high bid
    for a sell). They "Go" to who they think will perform to fill the order and expect that MM to "match" the "low offer" in
    the case of a buy (bid in the case of a sell). Even though this MM might in fact be the "high bid" and not really want
    to sell any more.

    As a wholesaler he must perform or he will get a reputation as a "non-performer" with the "Big" houses and will cease
    getting "calls" which means he will soon go out of business. I mentioned above that this activity is very significant to
    BB stocks. I say this because most of the trades in these BB stocks are "unsolicited" and are done through discount

    With the above groundwork laid, let me try to explain how market makers get short even if they like the Company;
    Lets say that a stock (shell) has been lying quietly at $.25 bid $.50 offered. A limit order comes into one of the MM's
    to Buy at $.50 for a thousand shares. Prior to this trade that MM may be "flat" (neither long or short any shares). He
    fills the order and is now short 1,000 shares. He may raise his bid hoping to find a seller to "flatten" out his position.
    But before he realizes it a wave of buyers have come in and cleared out all the $.50 offers. Now the stock is $.50 bid
    .75 offered. Here comes that "Big" firm he just sold the 1,000 shares to at .50 with another bid for 1000 at .75. He makes this print. Now he is short 2,000 at an average of .625. The market keeps moving and now its .75 bid 1.00
    offered. Now he has to make a decision.

    Just like investors, MM Hate to take a loss. So 9 times out of 10 he will now sell 2000 at 1.00 making him short 4000 but with an average .81. At this time he would love to see a seller at .75 so he can cover his short and make a few bucks.

    But instead the market keeps moving up. Now it is 1.00 to 1.25 and here comes the buyer again at 1.25. He doesn't want to lose the call so now he needs to sell 4,000 at 1.25 to keep his break even point above the bid. Now he is short 8,000. Market moves up to 1.25 bid 1.50 offer here comes the buyer now he feels he must sell 8000 here because "stocks don't go up forever".

    Now he is short 16,000. And so on and so on. If the stock keeps moving up, before he realizes it he could be short
    50k or 100k shares (depending how big his bank is). _________________________

    Finally the market closes for the day and on paper he may look all right in that his "break even" price may be around the closing price. But now he has to figure out how to entice sellers so he can cover this short. It is important to note that if this happened to one MM it has probably happened to most all of them.

    Some ways MM's entice sellers; Run the stock up with a "tight spread" in a fast market, then "open" up the spread to slow down the buying interest. After it has "cooled off" for a little while lower the offer below the last trade right after a small piece trades on the offer then tighten the spread so that the sellers feel they can take a "quick profit"
    by "hitting the bid" on the tight spread.

    Once the selling starts the MM's will walk it down quickly by only making small prints on the way down with the tight
    spread. Another way is by running the stock up in the morning, averaging up their short then use the above technique to walk it down in the afternoon.

    Hopefully after doing this for several days, it will demoralize the buyers. The volume will dry up and the sellers will materialize thinking that the game is over.

    Contrary to popular opinion, MM usually Do Not Cover in Fast moving markets either Up or Down if they are short. They Short More. They usually try to cover after the frenzy is out of the market. There are many other techniques they use but the above are the most popular.

    This technique works about 9 times out of 10 particularly in a BB market. However that is because 9 out of 10 BB stocks are BS. Remember what I said above. Most MM's don't have a clue as to the value of a Company until they get trapped. If the Company has solid fundamentals and a bright future. Then the stock will do very well. And the activity that caused the situation will prove to even help the future stock activity because it created an audience."

    Written by an anonymous individual.

    Mit folgendem Code, können Sie den Beitrag ganz bequem auf ihrer Homepage verlinken

    Weitere Beiträge aus dem Forum

    CYBL (A0ERW0) - Cyberlux - gepostet von Tekkysurf am Freitag 21.09.2007
    TC TradersCorner - gepostet von waxweazle am Dienstag 14.08.2007
    ILGY wann kommt der Rebound - gepostet von axcol am Dienstag 20.02.2007
    [OZ4] Oriental Minerals - gepostet von Frakmaster am Freitag 31.08.2007
    COPI (A0MR2Z) Compilance Systems Corp. - gepostet von Tekkysurf am Dienstag 11.09.2007

    Ähnliche Beiträge wie "MarketMaker ein must read für alle OTC und pinkis"

    List of movies i must remember to download - tic (Montag 12.02.2007)
    The life must go further bestätigung - Anonymous (Mittwoch 15.08.2007)
    SPAAAAAAAAMMMMMM - drelf (Donnerstag 16.07.2009)
    a must have! - vchristophv (Samstag 27.01.2007)
    The show must go on.... - Mareth (Montag 05.03.2007)
    Raid "must have UI" - PdHDracon (Donnerstag 03.11.2005)
    There must be an angel (deutscher Text) - vanessa (Freitag 06.10.2006)
    You must Emo - Sarge "Felon" (Donnerstag 21.12.2006)
    Bushido - Show must go on - Checkervara (Samstag 18.02.2006)
    ATLJ will Full an die OTC - axcol (Montag 05.03.2007)