The Resource Center

[jonny_red]

How to Set A Trailing Stop on Webull Application

[Lakota-45]

Exilent Post & Explanation ! Thanks for sharing !

[fnyack]

Thank you Ms Fox, so basically the King Kongs really don't know what they're talking about when they say they have the float locked up.

[fink]

TDA suck!
Check this out today. No reason. My pal in FNHI got this 6 months ago..
Sold all his shares to himself into his E*TRADE account..he used AON orders

[fink]

Anyone else see this.
Got me today. I know of one other that got this?

[CHILLWILL1704]

Thanks blinton very informative and I hope we get that gap up.

[fourkids_9pets]

that may be .. but notice what the actual data
shows for katx .. just for the month of june
(MM monthly volume report broken down by MM's)
and provided by finra

http://www.otcbb.com/asp/tradeact_mv.asp?SearchBy=issue&Issue=katx&SortBy=volume&Month=6-1-2010&IMAGE1.x=21&IMAGE1.y=9

---
MM'S: CHDN SSGI PUMA NOBL LFCM STXG

collectively did on katx for the month of june (latest known)
out of Total Share Volume done of 103,474,141 shares
the grand total for 5 MM's 787,457shares

CHDN ~ 15,000

SSGI ~ 56,000

PUMA ~ 255,875

NOBL ~ 415,582

LFCM ~ NONE

STXG ~ 45,000

what they are doing imo with at least 4 of these MM's
is they are being used to stack the ask (or bid) but
based on the total lack of volume *traded* thru them
for the entire month of june .. they have nothing

compare this data to the primary MM on katx for june

NITE ~ 50,644,286 approx 49%

--
it's worth tracking which MM does what over a sequence
of months .. the primary will ALMOST always be NITE

but seeing who is utilized each month and then comping
to *legit* volume traded .. goes a long way towards
avoiding the usual re: smoke and mirrors

--
4kids
all jmo

[faxedreceipts]

Just curious as to anyone's views of Etrade vs Ameritrade vs other brokers for daytrading? It's a bull trying to figure out which one to use!

[ryanmnly]

The Rat Pack.

Apparently there is a group of 5-6 market makers, referred to as The Rat Pack, that commonly show up after a stock runs past 0.50. They come in, aggressively short, hammering the bid to drive it down, and then cover when the price goes way down. If this is true, the implications are pretty obvious in regards to the FLDs. When they run past 0.50 and these guys show up, the stocks will get inundated with shorting. However, if no one sells, they don't cover their shares, the squeeze is on and the MMs are pitted against each other. It can work to an even more favorable position for long holders.

Here are two interesting links and an excerpt from each one:

http://thestockwizards.net/traders/small-cap-traders-investors-beware-of-the-rat-pack-market-makers/#more-2464

“In The Fall of 2009 when Bio-Tech Penny Stocks were dominating the market, The Stock Wizards had noticed a certain group of market makers working together to bring down certain OTCBB stocks. This Group of market makers is as follows: CHDN SSGI NOBL PUMA and STXG.

We have labeled this group of market makers as the RAT PACK. We’ll use another term for these market makers “Gang Bangers”. They look for Penny Stocks that have very high Market Caps. TSW noticed this week that the RAT PACK has an interest in a penny stock called KAT Exploration – KATX on the pink sheets.”


http://www.articlesbase.com/corporate-articles/don039t-trade-another-penny-stock-until-you-read-this-1802571.html

“The Rat Pack: Traders and Investors are not the only players in town we also have what’s called Market Makers, maybe some of you guys have heard of them. Market Makers are traders as well. They supply liquidity to a stock on a daily bases on thousands of stocks. With penny stocks we noticed especially when a stock is over .50, that a certain group of market makers will come into a stock which we call the Rat Pack These Market Makers are seeing the same thing as many smart traders are when a stock is getting very overvalued based on market capitalization.

We have identified the Rat Pack as follows: CHDN SSGI PUMA NOBL LFCM STXG. When a penny stock especially when it’s over .50, you begin to notice the Rat Pack starts to swarm or move in for the kill. They know and you know especially when a stock is heavily promoted and has a very high market cap they will come in and try to make their money all the time from the short side.”

[Blinton]

How Naked Shorting caused the Financial Crisis.

This 24 minute video is a must see. It highlights how Bear Stearns and Lehman Brothers were naked shorted in massive volumes just before their bankruptcies, and how regulators turned a blind eye to the matter.

http://video.google.com/videoplay?docid=-1873796856729853096

[Blinton]

Naked Shorting discussed by senator Robert Bennett.

Thanks to arewethereyet for posting this link

Robert F. Bennett, R-UT asks about the state of the United States economy and financial markets in this 9 minute video:

http://www.cnbc.com/id/15840232?video=652216599

[Blinton]

Understanding Level 2 and Market Makers.

Written by Stockalyzer.

http://stockalyzing.com/stock-learning/104-understanding-level-2-and-market-makers.html

[Ninja7]

"If the stock is so heavily shorted and we own more than the float, why isn't this reflected in the daily/monthly finra short numbers and the FTD (fail to deliver) numbers?" is one commonly asked question about float lock down (FLD) plays.

This is certainly a legitimate question and is often used by the bashers and doubters to undermine confidence in the eventual short squeeze and the claimed share ownership of the longs.

I made a couple posts concerning this on the C*** board, which I'll summarize here. Note that some of this may duplicate information already on this board, but here goes anyway...

The simple answer is that the finra and regsho numbers only reflect shorts that are cleared through the DTCC. The MM's can easily clear short transactions (naked and others) outside of the DTCC to avoid having them show up in the finra short and FTD numbers. In other words, it is easily possible that a stock may be heavily shorted (especially in pinkie land) and yet have close to zero FTD's and nearly zero monthly short interest.

For some more info, here are a few links that explain all this in more depth (in you haven't seen them already)...

http://www.businessjive.com/ (similar to the deep capture link below)
http://www.deepcapturethemovie.com/
http://www.daytrader.com/forums/showthread.php?t=40140

[Blinton]

Types Of Pinks. OTC Market Tiers.

http://www.otcmarkets.com/pink/otcguide/investors_market_tiers.jsp

Thanks to Bill de MT for recommending this post.

OTCQX

The OTCQX marketplace is the premier tier of the U.S. over-the-counter market. Investor-focused companies use the quality controlled OTCQX listing platform to offer investors transparent trading, superior information, and easy access through their regulated U.S. broker-dealers.

OTCQB

The OTCQB market tier helps investors easily identify companies that are Registered and current in their reporting obligations with the SEC or report to a U.S. banking or insurance regulator. OTCQB securities are quoted on Pink OTC's quotation and trading system and some may also be quoted on FINRA's OTCBB.

OTCBB

This security is one of approximately 40 OTC securities that are quoted solely on FINRA's OTCBB quotation system so market makers must use the telephone to make any trades.
Pink Sheets Current Information

Pink Sheets Current Information

Companies that follow the International Reporting Standard or the Alternative Reporting Standard by making filings publicly available through the OTC Disclosure & News Service pursuant to the Pink Sheets reporting requirements are designated as Pink Sheets Current Information. The Current Information category is based on the level of disclosure and is not a designation of quality or investment risk. This category includes shell or development stage companies with little or no operations as well as companies without audited financials and as such should be considered extremely speculative by investors.
Pink Sheets Limited Information

Pink Sheets Limited Information

Designed for companies with financial reporting problems, economic distress, or in bankruptcy to make the limited information they have publicly available. The Limited Information category also includes companies that may not be troubled, but are unwilling to meet Pink Sheets' Guidelines for Providing Adequate Current Information. Companies in this category have limited financial information not older than six months available on the Pink Sheets News Service or have made a filing on the SEC's EDGAR system in the previous six months.
STOP! Pink Sheets No Information

Pink Sheets No Information

Indicates companies that are not able or willing to provide disclosure to the public markets - either to a regulator, an exchange or Pink Sheets. Companies in this category do not make Current Information available via Pink Sheets News Service, or if they do, the available information is older than six months. This category includes defunct companies that have ceased operations as well as 'dark' companies with questionable management and market disclosure practices. Publicly traded companies that are not willing to provide information to investors should be treated with suspicion and their securities should be considered highly risky.

Grey Market

There are no market makers in this security. It is not listed, traded or quoted on any stock exchange, the OTCBB or the Pink Sheets. Trades in grey market stocks are reported by broker-dealers to their Self Regulatory Organization (SRO) and the SRO distributes the trade data to market data vendors and financial websites so investors can track price and volume. Since grey market securities are not traded or quoted on an exchange or interdealer quotation system, investor's bids and offers are not collected in a central spot so market transparency is diminished and Best Execution of orders is difficult.
Caveat Emptor

Caveat Emptor

Buyer Beware. There is a public interest concern associated with the company, which may include a spam campaign, questionable stock promotion, known investigation of fraudulent activity committed by the company or insiders, regulatory suspensions, or disruptive corporate actions. During the time it is labeled Caveat Emptor, any stock that is not in the Current Information category will also have its quotes blocked on otcmarkets.com.

[Long2Retire]

DTCC

http://futurenewstoday.blogspot.com/2009/10/dtcc-wall-streets-untouchable-bookie.html

[Long2Retire]

Deep Capture - the site

http://www.deepcapture.com/

[Long2Retire]

Hedge Funds and the Global Economic Meltdown (Part 1)

Hedge Funds and the Global Economic Meltdown (Part 2)

[Long2Retire]

You may want to consider this linked post as a valuable reference too.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=33434310

[Blinton]

Market Manipulation - Part 4 - Hiding FTDs.

(FTD: Failure To Deliver.)

A special thanks to fourkids_9pets for sending me this article.

Let us look at where unsettled trades can reside within the piping of the “factory” that is our nation’s stock settlement system, The Depository Trust & Clearing Company (“DTCC”). I will use Goldman and Morgan as hypothetical examples only.

“Desked trades” – Imagine Goldman takes your order for 1,000 shares of stock, but stashes your order in a desk and sends you statements saying that you have those 1,000 shares in your account (and use your money towards the $10 billion they pay themselves at the end of the year for being so clever). They have written a CDF to you without your knowledge: there is a 1,000 share failure-to-deliver to you at Goldman (which no one else knows about, incidentally).

“Pre-netting” – Goldman has one client sell 5,000 shares and another buys 3,000. The seller never delivers. Goldman “pre-nets” the trades before submitting them to the DTCC. Hence, the DTCC sees only 2,000 shares of the failure.

“CNS netting” – Goldman submits to the DTCC’s Continuous Net Settlement system that it sold 2,000 shares that it does not deliver. Imagine Morgan Stanley was on the other side of that particular trade. But maybe Morgan has a client who sold 1,000 to a Goldman client, and which that Morgan client failed-to-deliver. The DTCC nets the two trades, and therefore sees just 1,000 shares of failure (Goldman to Morgan).

“Stock Borrow Program” (“SBP”) – The DTCC looks at that 1,000 share failure, and says, “We have 400 shares we can loan Goldman from our Stock Borrow Program”, i.e., from the accounts of other BD’s within the DTCC. That reduces the failures it sees to 600.

“Ex-clearing” – Suppose Goldman and Morgan apply to the DTCC to move 500 of those fails ex-clearing, and the DTCC approves. Those 500 FTD’s are turned into a derivative contract between Goldman and Morgan. As a private contract, it is not regulated by the SEC, and the DTCC does not even know when that contract gets cleaned up, if ever.

“Offshore Failures” – Suppose someone sells 1,000 shares into this market from a foreign offshore exchange? There is a different terminology to describe such failures, and therefore the data is hard to get to. What is clear, however, is that there is little pressure to clean up failures among exchanges.

In this example, there are 100 failures at the CNS level. Yet there were 7,000 failures throughout the system. Therefore, we should remember that, however many unsettled equity trades there are at the CNS level, it is likely to be a fraction, and maybe a quite tiny fraction, of the total unsettled trades in the system.

What is the ratio of total fails in the system to those trapped in the CNS system? No one seems to know (and in fact, while the individual pieces of data are known individually, I strongly suspect that no one party has the bird’s eye view of how many of these there are at all levels). The estimates I am told range from 3 to 15. For ease I will refer to this as, “The Iceberg Principle” and the ratio of total failures to CNS failures as “I”.

So how big a problem is this?

* The last reported size of the failures-to-deliver at the CNS level are $8.7 billion.
* By Iceberg Principle, total failures = I X $8.7 billion ˜ $30 to $120 billion.
* By Feynman Principle, total cost to cover = F X I X $8.7b = F X ($30 to $120 billion).

So respectfully, Wall Street, I believe you are Oak Ridge, Tennessee, blithely going about your jobs at the factory, taking for granted “the piping” that is our settlement system. I believe you have manufactured, and are sitting squarely on top of, a financial atomic bomb. That’s not good for you, of course, and if it goes critical, America is downwind.

Second: So now your questions are: Doesn’t netting remove the possibility of manipulation? And, What evidence is there regarding the size of failures in those crevices?

a) Netting does not remove the possibility of manipulation, but masks it instead. Assume Goldman has a client selling 1,000 shares of stock ABC, and Morgan has a client who buys those 1,000 shares, but the shares never deliver. However, Morgan has another client who sells 1,000 shares, and Goldman has one who buys those 1,000, but they also never deliver. In total, there have been 2,000 shares sold but not delivered. However, by pre-netting the brokers’ fails, those failures disappear. Collectively the two sellers have weighed down the market with 2,000 shares of phantom stock, but the netting makes 0 fails show at the DTCC.

b) What is the evidence supporting my claims regarding the size of the failures in those other crevices? I am 100% confident of my claims because I possess incontrovertible proof that, for one particular stock whose name for legal reasons I cannot disclose (but you may be able to guess), the failures maintained by justone broker injust the ex-clearing crevice have been, at times, greater than the sum total of the failures showing up in the CNS system: Thus to me, this is a settled question.

For one not in a position to review such evidence, however, you will have to do what I have done, which is, interview people in the settlement industry, find out where trade failures can persist, and for how long, and why. I think any fair-minded researcher will quickly be told of how much slop there is in these stock settlement niches, how easy it is to take things ex-clearing, how deep the offshore failures run, and so forth. Then the fair-minded researcher will try to get some data from the SEC, or DTCC, and will discover that he is stonewalled on even the most basic information, a fact which would, I think, raise the suspicions of that fair-minded researcher. Indeed, this is where some members of your esteemed profession have rubbed me raw, because instead of saying, “Why can’t the Establishment release the data, if there is really nothing there?” (as until a few years ago I would have expected any journalist to reason), instead almost all of them have said, “Well, I agree there is evidence of settlement failures, but the Establishment says there’s no problem, and they won’t release the data to show me one way or another, so I’ll just stop digging.” After all, remember that we are not debating the properties of some newly-discovered subatomic particles: this data is knowable, and is in fact, known. Good luck trying to get anyone to release it to you (without filing the kind of massive, one-in-a-lifetime lawsuit against an entire industry, as I have done).

I hope this helps.

Patrick

The Original Article In Full

http://norris.blogs.nytimes.com/2009/04/30/is-naked-shorting-gone/?pagemode=print

[Blinton]

Naked Shorting Legalities, A Common Misconception.

If you search for "naked shorting" on the internet, you'll often find people talking about how naked shorting is always illegal. This is not entirely true. The post below does a good job elaborating on this matter.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50675209

Author Unknown - Reposted by exit301 - CDIV board - Thursday, May 27, 2010

Contrary to the financial media not all "naked short selling" is illegal. A "bona fide" MM can legally naked short sell shares into markets characterized by an excess of buy orders dwarfing sell orders. He accesses this thing called a bona fide MM exemption from effecting "pre-borrows" or "locates". In order to legally access this exemption you need to cover your naked short position on the very next downtick in share prices. Nobody covers though. Why? Because it costs money to cover and due to corruption on Wall Street you can gain access to the funds of investors even if you sell shares that don't exist and never deliver that which you sell. These crooks never, never, never cover preexisting naked short positions until forced to. Aggregate levels of prexeisting naked short positions go constantly upwards because of this. There comes a point in which the naked short position can't be covered without risking financial collapse. Why? Because the first thing you do when you cover is stop your daily naked "maintenance" short selling. If you've been pretty much the only seller in the market for years then the share price will gap upwards just from stopping the maintenance short selling. Remember these "open short positions" are collateralized with cash. The crooks need to naked short sell all day long just to keep their cash collateralization requirements in check. If these guys had to cover an astronomically large naked short position that has been building over 12 years in a market that is already gapping upwards then it could be financially cataclysmic both from the expenses of buying as well as meeting higher collateralization requirements for the uncovered balance. The crooked MMs will win 98 of 100 battles. The 2 they lose will sting financially but will easily be covered by the 98 victories.

[Blinton]

Market Manipulation - Part 3 - Market Maker Signals.

http://www.thepennystockblog.com/signals.html

Penny traders believe that Market Makers (MM) will "signal" moves in advance buy using small amounts of buys or sells as "signals". The "signals" are such a small amount of shares (worth no more than 5 or 10 dollars) that no trader would have paid a commission that costs more than the amount of shares bought. The "signals" are from one MM to another.

* 100 - I need shares.
* 200 - I need shares badly,but do not take the stock down.
* 300 - Take the price down so I can load shares
* 400 - Keep trading it sideways.
* 500 - Gap the stock. This gap can be either up or down, depending on the direction of the 500 signal.

[Blinton]

Market Manipulation - Part 2 - SEC and OTCBB.

http://www.sec.gov/rules/concept/s72499/klaser1.txt

by Kenneth Klaser
June 26, 2000

Ladies and Gentleman:

I am a private investor/trader and I am writing in response to concerns that
I have regarding short selling abuses I have witnessed in the OTCBB marketplace.

Introduction

It appears that the SEC has deliberately, either through inaction or clever
manipulation of the SEC's rule structure as suggested over the years by
Brokerage's attorneys, created a two tier system of stock market exchanges
in the US. One system for the national market exchanges that has short
selling protections for the investor with pockets deep enough to afford the
several dollar and up prices for stock, and a second system of exchanges for
the "poor" investor, those investors who have determined they can only
afford stocks trading at less than 10 cents, and who has not been afforded
the same short selling protections deemed necessary solutions to the stock
market crash of 1929, namely the 1934 SEC act.

This has created a system whereby the "rich" investor is protected from
short selling abuses, while the "poor" investor is cheated by short selling
abuses (bear raids) that are allowed by self regulation of the Market
Makers. Most poor investors have been drilled by educators on the stock
market crash of 1929 in grade school, and truly believe that the protections
enacted in 1934 exist for them too, when in reality a double or multiple
standard has been deliberately contrived.

Is the SEC is implicated in a scheme to defraud OTCBB investors of their
hard earned dollars?

The SEC has allowed the structure of securities laws to favor big money
interests and "manipulation of the little guy" over and above the interests
and concern of the vast majority of the investing American public. The
current SEC rule structure has parallels similar to the character "The
Sheriff Nottingham" where the poor are robbed to pay for the rich. America
is not supposed to be this way!

Discussion

Bid and Ask Volume and how it relates to Technical Analysis of a Stock

It has become painfully obvious that big money Market Makers have a
stranglehold on the little guy in the OTCBB stock market. I have personally
observed many times more than a 1:2 (bid:ask) volume ratio of the trades
executing at the bid versus the ask, only to be followed by the bid and ask
ticking down in stocks that I own. A discussion of the technical mechanics
of an OTCBB investor's reality is in order here.

A comprehensive study of OTCBB time and sales reports with actual buys and
sells listed proves that certain market participants sell at the ask, and
buy at the bid. These reports were for about a year available to anyone
requesting them free of charge from
https://www.otcbb.com/secure_asp/tradeact_report_request.asp?type=tands,
however, recently a pricing structure was devised that makes these reports
much too expensive for many investors. Nevertheless, these reports, when
combined with other data that report the time and price level of the inside
bid and ask, do establish that some market participants are able to buy at
bid and sell at ask.

Why is this noteworthy?

Because a common technical method of measuring accumulation/distribution of
a stock is to measure the volume of trades at the bid (selling), and compare
it to the volume of trades at the ask (buying), and to note the ratio of the
two. Theoretically speaking a ratio of 1:1 should represent an equilibrium
level where price neither goes up or down, since it shows that buying and
selling activity are roughly equal. If there is more trading volume at the
ask than at the bid, then price should go up, and conversely if there is
more trading volume at the bid, then price should go down.

But in the OTCBB world, it's common knowledge that a ratio of about 1:2.5 or
1:3 (volume at bid to volume at ask) is required to move the price up, and
this up move is often delayed by days and sometimes weeks. On the other
hand, for prices to move down requires only fractionally less than 1:3.
Prices commonly drop when the ratio is 1:2 or less.

Why is the ratio so much greater the theoretical 1:1?

In these instances which happen everyday in most OTCBB stocks there is more
trading occurring at the ask than the bid, yet price falls! Why?

Certain market participants are allowed to routinely buy at the bid and sell
at the ask, and these participants do much more selling at the ask than
buying at the bid, in order too fool the general public that uses technical
analysis in their trading arsenal into believing more buying is taking place
than is actually occurring. Additionally the market participants doing the
majority of the selling at the ask (the Market Makers) are not the same
entities as the market participants doing the buying at the bid. It is my
contention that this is allowed by the SEC to deliberately fool the "little
guy" thereby allowing the Market Makers to conceal sells in the ticker tape
while simultaneously making them appear to be buys because they occur at the
ask. This should be considered Market Maker Manipulation, but unfortunately
under the current rules it is allowed. Has the SEC been implicated in fraud
by allowing this type of unusual buying and selling activity by certain
market specialists while at the same time other market participants, namely
the general public do not receive such favorable prices for similar trades?

Volume Manipulation and the "Market Maker orchestrated Pump and Dump"

Volume Manipulation is another area where Market Maker's collude to create
the impression that there is more activity, accumulation or distribution,
then there actually is. For example, Market Maker A buys 100K from Market
Maker B, who then sells them to Market Maker C, then Market Maker D buys
them, making it appear as if there is 300K worth of volume, when all that
was happening was a "Churn" game that served to inflate volume for the day.
For a more in depth discussion of how this works, please see The Forbes
article titled "One Day Soon the Music's Going to Stop"
http://www.forbes.com/forbes/072996/5803072a.htm

The core aspect of this manipulation is the structure of NASDAQ's ACT system
itself, and which can be discerned by studying the buys and sells as they
are reported in the OTCBB time and sales reports, and by studying the
reporting as it occurs in the ACT system. The major distinguishing feature
here is that Market Maker to Market Maker transactions are recorded on the
sell side only (same as an investor buy), in contrast, the ACT system
records both buys and sells by Market Makers when the trade is being made
with the general public.

Lets look at a few examples, and please note that the side of the trade is
inverted depending upon the market participants "point of view." When a
Market Maker buys from the general public, it's the same as an investor
sell, it is recorded as an ACT system buy or "B". When a Market Maker sells
to the General public, which is the same as an investor buy, it is recorded
as an ACT system sell or "S". So the Market Makers report both buys and
sells to the general public. Unfortunately here is where the rules change to
the detriment of the average investor: A Market Maker to Market Maker
transaction is recorded solely on the sell side as an "S", not on the buy
"B" side. If a Market Maker buys from another Market Maker, it is not
recorded in the ACT system as a "B", it is only the selling Market Maker
that reports it. This is the core reason that it appears in the real time
price stream for OTCBB stocks that a bid:ask ratio of greater than 1:3 is
often required in order for prices to move up, since a Market Maker to
Market Maker transaction represents no change in the supply demand
equilibrium of a stock. The excess over 1:1 is Market Makers trading with
each other.

All sorts of technical accumulation/distribution models use volume in their
calculations, and this churn game where Market Makers sell to each other can
be used to manipulate the buying and selling of many who use such technical
models in their trading. These types of churn trades are all but impossible
to discern from retail trades and to my knowledge are currently completely
impossible to discern in real-time. The Market Makers combine this "churn"
trading with artificial price walk downs and naked shorting, and you have the
potential of complete Market Maker Manipulation of the whole price and volume
chart. This would be exceedingly profitable to conspirators at critical
technical junctures such as the apex of triangles and quiet, pre-breakout
trading ranges to make it appear that the order flow is going opposite to the
"real" order flow.

Why are MarketMaker's are allowed to report these churn trades (Market Maker
to Market Maker) as volume, since supposedly a Market Maker is only
concerned with "making a market?" There is no legitimate need for volume
figures reported in real time price streams as well as end of day price
reports to include Market Maker to Market Maker transactions. After all, who
is the market being made for? Another Market Maker?

Volume manipulation is a type of "pump and dump" scheme orchestrated by and
for the benefit of the Market Makers themselves. It works like this: The
Market Makers start selling to each other to artificially inflate the volume
figure over a period of days to generate investor interest, but they do not
yet start Naked Shorting. Now after some number of investors have laid down
their hard earned money and there has been some price appreciation, Market
Makers then start to Naked Short the position, effectively capturing the
Investors Money, as price erodes due to the dilution that the creation of
the short positions cause. This capture of investors money occurs in the
event the investor has a stop loss figured into their trading strategy which
mandates them to limit their losses, so they sell due to price erosion
caused by Naked Shorting. Stop loss's are always recommended in beginner's
guides to technical analysis and automated trading strategies.

I wonder why?

In any case these stop loss strategies combined with the flawed reporting
structure of the real time price stream, line the Market Makers pockets with
huge sums of money.

Naked Shorting, Sophisticated Hedging, and Price Manipulation

Thomas Jefferson once said something to the effect: "Any man has the right
to swing his arm as far as the next mans nose, but no further." Allowing
large and sophisticated portfolio holders to short against a stock I hold
long as a hedging tactic when shares of another companys shares are the
other leg of the said hedge, and further which has the effect of causing my
stock holdings to tick downwards, is a violation of Thomas Jeffersons idea.
In a similar fashion so does Naked Shorting. Namely, that sophisticated
hedging and Naked Shorting tactics "extend their arms into and through my
nose." These types of tactics should be stopped since they run counter to
the ideals of the vast majority of Americans, and the spirit, if not the
letter of the law, as envisioned by our Founding Fathers. No one should be
able to sell what they don't own, only what they do own!

To sell something before it's purchased is not a stock sale, it's a hybrid
stock/futures transaction, since the timeline is artificially reversed. It's
nothing more than a promise to purchase at some time in the future, and in
the OTCBB the suspicion is that it's often later, rather than sooner. This
contrasts with what release No. 34-42037 suggests about short selling: The
buy to cover is "usually the same day the purchase of the short sale is
executed." On the other hand, an outright stock buy carries no implication
to sell at any time in the future, and the same can be said of a normal sell
when the buy occurred first...no further obligation to buy or sell further.

The current practice of Naked Shorting and also Hedging calls into question
the entire ethics of our legal system as it relates to the purchase and sale
of a company's stock.

Why do you allow the Market Makers, when acting in their roles as "bona-fide
Market Makers," the right to short a stock without even an affirmative
determination of the existence of shares to short against?

This activity of Market Makers essentially makes counterfeit shares of a
company, then introduces them into the supply demand equilibrium of any
particular stock in order to deflate or dilute the current value of each
share held by shareholders. It's stated that this is done so that investors
aren't forced to pay artificially high prices during short and temporary
supply demand imbalances.

Why aren't Market Makers required to be responsible to the Company and it's
shareholders with respect to an accounting of the Short Interest in real
time held by Market Makers?

There is no oversight currently that insures that Market Makers are covering
their short sales when the temporary order imbalance is corrected. It appears
to many OTCBB traders that the Market Makers are keeping their short sales
many days before covering. A similar suggestion was made as documented in the
SEC Release No. 34-42037, File No. S7-24-99 in the sections C, Previous
Reviews of Short Selling, item 3, 1991 Congressional Report on Short Selling,
specifically numbered items (7) and (8). This lack of action from the SEC has
let the Market Makers dictate the supply and demand for any given stock they
make a market in and thereby they also control or "manipulate" the pricing of
each and every share, for extended periods of time.

"Section 10(a) of the Exchange Act gives the Commission plenary authority to
regulate short sales of securities registered on a national securities
exchange, as necessary to protect investors"

If this is so, why aren't the short sales of OTCBB stocks regulated by the
SEC?

The SEC has allowed the OTCBB market to be self regulated by the NASDAQ, who
in turn allow Brokers for OTCBB stocks to have "run away" naked shorting. I
presume it has been convenient for the Market Makers that the SEC has not
determined that the OTCBB is a "national securities exchange." The inmates
are running the asylum, and the SEC needs to wake up.

Conclusions

Current Securities Law need to be amended with respect to the OTCBB market
so that:

a.. The Brokerage practice of Naked Shorting in the OTCBB market is
stopped immediately. The number of outstanding shares of any stock should be
fixed at whatever number the issuing company has determined. Trading
entities must be prevented from "adding to the trading supply of stock
available to purchasers," and by so doing diluting the price value of
current shareholders.

a.. Market Makers are disallowed the right to Short Sell OTCBB shares when
the Market Makers are trading for their own accounts unless the seller
personally owns the shares being sold. They should never have the right to
borrow any other entities shares for this purpose under any circumstance
whatsoever, due to their information advantage and greater flexibility
granted to them through NASDAQ self regulation over other market
participants such as the general public.

a.. When the Market Maker is acting it it's role as a "bona fide Market
Maker" the Market Makers must be forced to report the real time current
total short sales accumulation numbers in aggregate form in the real-time
price stream, available to all through many market data vendors at
reasonable cost. Computer Technology now allows this with the simple
addition of a few lines of code in publicly available price feeds. The OTCBB
already has a portion of this capability in it's ACT system, but it's not
available to the public at a reasonable cost, nor is it available in
real-time to the general public, only to other Market Makers. Market Makers
must be held responsible to companies and the shareholders for failing to
report this critical market data freely to the trading public, as a check
and balance on their own corrupt trading practices.

a.. Churn trades between Market Makers should never be reported in the
volume figure at all. This would halt Market Maker orchestrated and price
stream centered "pump and dump" schemes.

a.. Violations of these suggested changes to existing law should be
enforced with mandatory jail time, not merely monetary punishments, which
serve as little deterrent when contrasted with the huge sums of money they
are culling from investors day in and day out. The current monetary fines
imposed by the SEC for violations of SEC rules are relatively speaking
"pocket change" to the corporate firms involved. They are nothing more than
a token "slap on the wrist."

Where is Robin Hood when you need him?

Kenneth Klaser,
Private Investor/Trader
United States of America

[Blinton]

Market Manipulation - Part 1 - Making The Market

http://www.traders101.com/article-market-makers-1.asp

Making the Market
by Trader Jack, 2004

Almost everything you have ever been told about the world's stock markets is wrong.

Almost everything you have ever assumed about the world's stock markets is also wrong. You probably believe that share prices go up and down due to classic 'supply and demand' laws. You probably believe that over time, the world's stock markets will go up because of increased economic production, or inflationary pressures. You probably believe that your broker, though undoubtedly a parasite, makes his money reasonably fairly by charging you an honest declared spread between his bid and offer price. You might even be laboring under the delusion that 'fundamentals' or 'interest rates' drive price.

Wrong, wrong, wrong and wrong.

So where's the proof, I hear you squeal. OK, here we go.

Market Makers and their Role

Markets are composed of players of all sizes (including you and me!), the most important of whom are 'Market Makers'; firms who have an obligation to quote a price on particular securities whatever the overall market is doing. Brave of them, I hear you think - imagine having to buy Enron as it plummeted. Surely they ended up with most of that worthless stock in their own portfolios? Er, no. So where did it go then? Patience, little investor.

Get something straight in your mind now - although these market makers would like you to think that they are simple 'middle men', buying from Fred and selling to Joe, while pocketing the spread between those two prices in an honest, upfront sort of way, the truth is rather more devious (not to mention complicated). The real tool that market makers use to create their own profits is embedded within that sentence. The spread. I hear you think, "I have no problem with them charging a fee for their service - everyone has to make a living, and it's only a few percent after all! ". Wrong again! The whole concept of a 'spread' allows a market maker to control the market in the same way that a shepherd controls a flock of witless sheep.

How the Market should work

Imagine that a market really IS controlled by the laws of "supply and demand", and rises and falls due to the imbalance between external buyers and sellers (you and me) competing for, or shunning certain securities. In this wonderful la-la land, market makers really don't care what the market does, as they make their own money from the spread. And a nice profit is is too. But hang on - isn't there any way to make MORE money from these investing sheep? Of course there is.

How the Market really works

To lubricate their transactions, market makers need a supply, or inventory of the securities they support. This can either be real certificates, or via a process called 'stock lending' (don't worry about THAT one yet - it basically means they borrow stock or "pretend" they have it). Once you have an inventory of stock, and the concept of 'spread' (or 'edge'), a marvelous opportunity opens up. The average price at which a market maker accumulates a security and the average price at which he distributes it are going to be different. Add this to the fact that the market maker sets the price tick by tick, and boom! A license to print money. Observe closely, this is a good trick.

Let's play Chicken

I, as a market maker, decide (for no real reason, or perhaps because there has been some trivial news about them) that stock in ABC Corp is my plaything today. I don't have much of an inventory in that particular security, so what do I do? Mark up the price so external holders will sell me some? No. I mark the price DOWN. Oof. Some external parties see this as a buying opportunity, and as I am a market maker, I am obliged to sell them the security at the new, lower price, meaning I am even shorter on that security.

Sounds mad, doesn't it? But it doesn't matter, because I mark the price down again. And again. And I keep on doing it till I hit the stops of external parties who are long, but weak, or the limit orders of people who are short. As a market maker, I know where these stops and limits are. I own the book, after all.

Ordinary Joe Public mostly think the market follows the laws of supply and demand, follows trendlines or fibonaccis etc, which means they all tend to put their stops in similar places ('resistance' anyone? 'support'? That's right, it exists!). This is a game of chicken, really, and YOU will ALWAYS crack before ME (the market maker), because I can take the market to zero, or to the moon. You have to meet a margin call.

So now I am a market maker who has a LOT of supply of ABC Corp, which has fallen significantly in price. Looks like I'm holding a plum, doesn't it? What do I do next?

So what does a market maker do?

...That's right. I mark the price up. And I QUICKLY mark it up to the point at which the current price is ABOVE my average purchase price. So voila. I'm in profit. In a fairly big way. All I need to do now is unload this stock to you over a period of time at a price above my average, and I am rich. You, of course, sold it to me on the way down, and are regretting it because it is probably already way above where you exited (strange isn't it, how the market seems to 'hunt your stops', and then reverse?!) If I do this right (and it is an art form, for which successful brokers get paid multi-million dollar salaries), I create the illusion that the market is totally random, and is being driven by YOU, whereas I am simply a fee paid middleman, facilitating your activities. Even worse, I give you the vague impression that you are actually pretty good at it, and if you can only get your stops a little more accurate, you will stop losing money!

As I mark the price up, external parties start to worry they will miss out on this growth, and begin an ABC Corp buying frenzy, allowing me to unload. Everyone is happy. Most of the investing public are sitting on unrealized (imaginary) assets, while I am converting worthless shares into hard cash.

So, I have made a real, cash profit. You are sitting on an unrealized paper profit. We are all happy. Until I repeat the process and stop you out. Again. Are you getting the picture yet? In fact, once I have built a little momentum in a particular direction (long OR short) I can let you prolong it, settling simply for my spread profit. I know that eventually the run will peter out, and then I can force it the other way, easily dislodging those who took a position too near the end of that particular phase.

Let me paraphrase. When the market is zooming up madly, market makers are actually selling (usually stock they don't own!) in preparation for a subsequent managed fall, during which they can buy it back for less (i.e. make a profit). When it is crashing down, they are actually acquiring stock, in preparation for the process of selling it back to you at a higher price (i.e. make another profit).

Does it EVER behave according to supply and demand?

So how do you, as an external investor, determine whether the market is being 'sheepdogged' by the market makers, or is actually moving under the real influence of normal supply and demand? Slope. Key to a market maker being able to effectively set his average price is the speed with which he marks it up or down. For example, when squashing prices downwards, if the market maker lets the process take too long, he will accumulate stock at too high an average price, making it hard for him to reverse out at a profit. He needs to buy it at an average price nearer the low than the high. Speed is of the essence. That is why a typical day on the DOW (for example) consists of a wild rally or fall, followed by a gradual retracement, then perhaps another wild flurry of activity. Most action during the day happens in very short time periods. Now you know why.

Obviously, one of the reasons this is an art form to the market maker is that it requires a mind in tune with the thoughts of the general public in order not to 'kill the golden goose'. If a market maker is too blatant in these cash raids, the public, while not actually understanding the process, might stop playing due to the '5 times bitten' syndrome.

Long Term Rising Markets

The process works just as well either way, i.e. long or short. So why, I hear you ask, does the market generally seem to continue to rise over time (on average)? Economic growth, inflation, etcetera, undoubtedly play a part, but from a market maker's view, keeping the long-term trend up is important because it "keeps the public in the game". If everyone is convinced that long term the market will outperform property or other investments, they will keep trying to invest, no matter how often a market maker raids their account and smacks them round the back of the head with a wet flounder. This is the reason why stock markets will continue to outperform any other sort of investment over the long term - if it didn't the market makers wouldn't have anyone to suck on, and until other investment types also have a super class of manipulators, things won't change. From their own perspective, they would prefer it to wobble around a set middle, so they could cream you up and down, with little thought involved - this would enable them to hire less expert staff and cut their costs.

OK, so what about Bear Markets?

You just keep asking these hard questions, don't you? The phenomenon of bear markets is reasonably straightforward, and is basically a question of timescales. Markets are fractal - that is, without any time clues, the movements of price look remarkably similar at any resolution, from a single day up to yearly charts. Different players work to different timescales. A bear market just happens to be an occasion when a long-term element needs the markets to fall again, so they can re-supply. The more cynical among you might argue that extreme preceding bull phases mean that a standard bear jerk off is needed to restore any semblance of credibility to the game, and there may indeed be some truth in that. The more niave among you may argue that world economic cycles cause these phenomenon, in which case, the very best of luck in your trading!

Is it possible to 'get on the same side' as the market makers...

and thus win big? Of course it is. Getting right sided with the market makers takes a little practise, but is well worth the effort, because then YOU can parasitically ride THEIR efforts!

Trader Jack

[Blinton]

Naked Short Selling OTCBB and Pinksheets.

Originally posted by RLWSNOOK - a DayTrader.com board - January, 30, 2009
Brought to us by Ninja7 - CDIV board - Wednesday, May 26, 2010

For years people have said that these companies are scams only for some crooks to make some money off of while they sell stock, and before they go bankrupt... Now I do think that goes on, however... that is not always the case there are very good companies on these boards as well.

I am sorry if this post goes a long time I will try to cut back as much as possible but it is very hard to say what Im going to say without going on and on..

OK so why does a company come to the OTCBB or pink sheets? It is simple, that is a place for them to access capital.. Now many companies don't understand how stocks work and that selling some shares to keep your company growing is seen as a very weak sign... (Even if they continue to grow their EPS)...

So what happens, a hedge fund or Market maker (mm) finds a stock that has some volume... if they issue shares and raise the AS they will start to Naked short sell (NSS) the stock... Now there are many boards like this one where people talk about their stock every day.. These hedge funds\mm hire people to go on the boards, and bash the company... They blame them for selling shares and doing shady things, all while their bosses (the hedge funds, and mm) short the stock to no end...

Most companies have no way to stop this, and it drives the PPS down, which when they need capital they have to issue even more shares than before... Then once they figure out what's going on it is too late, they complain about naked short selling, but the bashers on the board have already won all the longs over... they get them (the longs) to sell their shares, and the company doesn't have the capital to buy back the stock or stop it... they spend too much time worried about their stock than they do about their company and they go out of business.

Once this happens the bashers are like see I told you so, they are just crooks who wanted to issue stock, everything they ever did was a scam... the longs are all upset so they agree and have distrust for the company and all others so if anything else ever happens close to this, they say OMG this happened with xyz stock I so know what's going on (of which there is already a basher there saying yup your right)...

but remember if a company goes out of business the hedge fund\mm never has to cover their position..

So wait you ask, I thought the government was suppose to protect us against Naked short selling and what about the REG-sho list.???

I agree the SEC is suppose to look over short selling, but a few years ago they said it never could happen and doesn't go on in these markets, then once they were forced to look into it, they said they had to grandfather in the fake shares because there were too many... It's a joke people the SEC has done nothing. and is in the back pocket of hedge funds and MM...

But ya you say they have been cracking down on it and have a REG sho list for Fail to deliver's (FTD's fake shares that never are filled.. what this means is they sold you something but never gave it to you, it acts like a stock but really is just air... they sold you nothing)...

The way FTD's show up is when they happen through the regulatory body the DTCC.. but MM can go outside of the DTCC and clear these shares without it showing up... (this is known as ex-clearing).. So pretty much it is like doing a black market sale... the mm is given money for something that is fake, and because the DTCC doesn't know about it, it doesn't show up on the REG-sho list...

there are a bunch of other loopholes for Naked short sellers to do this but I can't go into all of them here. Former chairman of the SEC PITT speaks of this problem in this youtube video you are welcome to watch it to see the other issues.

This is a very big problem in many ways.
1. the MM and hedge funds are stealing from you the common share holder
2. our sec does nothing about this
3. the mm and hedge funds are cutting off the small companies which could help to grow our economy and get us out of this mess we are in right now..
4. The hedge funds and MM can not cover their short positions and if forced to it would pose a systemic risk to our economy...
5. Many younger investors look to the micro-cap companies to invest in because they don't have the capital to invest in larger ones. By doing this it makes it so they will be less likely to invest in stocks and our economy will not grow as quickly because people won't trust the system...

let me know if everything was clear, I gave one reason for the NSS to happen but i know for a fact there are 100's of others, just wanted to keep it simple...

It is a very hard point to understand so I don't expect you to get it right away... but I look at it this way... Imagine the world with no NSS as the world when people thought the earth was flat... It wasn't true but they bought it as true.. Now the world with NSS is the world that we live in.. It is hard for the flat world people to see this to be true, but if they look into it more they will come to understand that the world really is round..

If you don't believe me or need more info on how shady our system is and Naked short selling there is a great slide show it is very long but really worth it to watch... http://www.deepcapturethemovie.com/

Hope, I opened a few eyes. If you have any questions or don't understand or don't agree, feel free to post and ask about or dispute my points...

Original Posts

* http://www.daytrader.com/forums/showthread.php?t=40140. (Original post)
* http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50634904 (Ninja7's post)
* http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50636374 (craig baker's reply)

[Blinton]

Level 1, 2, and 3 basics.

Also commonly known as level I, II and III.

Stock quotes are constantly changing during a market session. A lot of websites publish delayed quotes. Level 1 and 2 platforms offer real-time quotes for investors while Level 3 offers real-time quotes plus deeper information, abilities, and advantages.

Quick Explanation

Level 1

Level 1 prices are the best bid and ask prices currently on the system. These have the highest bid price and lowest ask price for each stock or security. Level 1 pricing is what an investor sees for "real time" stock pricing and on the order screen of a regular brokerage account, according to Investopedia.

Level 2

Level 2 pricing shows an expanded list of the bid and ask prices. The level 2 pricing includes the size of the bid or ask and who it is from.

Individual traders can purchase a Level 2 quote package from numerous vendors. Some online brokerage firms provide Level 2 pricing for free to traders that have a certain level of activity and commissions.

Level 3

Level 3 pricing is for registered market makers who can actually put bid and ask quotes into the electronic trading system.

Level 3 trading is restricted to FINRA--Financial Industry Regulatory Authority--registered firms. Level 3 trading is used by market makers in individual stocks and by the trading desks of stock brokers. The level 3 trading system is not available to individual investors trading for their own accounts.

Long Explanation - Level 2

Level II can provide enormous insight into a stock's price action. It can tell you what type of traders are buying or selling a stock, where the stock is likely to head in the near term, and much more. Here we explain what level II is, how it works and how it can help you better understand open interest in a given stock.

What Is Level II?

Level II is essentially the order book for Nasdaq stocks. When orders are placed, they are placed through many different market makers and other market participants. Level II will show you a ranked list of the best bid and ask prices from each of these participants, giving you detailed insight into the price action. Knowing exactly who has an interest in a stock can be extremely useful, especially if you are day trading. (For further reading, see our Electronic Trading tutorial.)

This is what a level II quote looks like:

[UBSW, 102.50, 50] which translates to: [Market marker, Price, Size]

This tell us that UBS Securities is buying 5,000 shares of stock at a price of 102.5. Note that the number of shares is in hundreds (x100). Now let's take a look at the market participants.

The Players

There are three different types of players in the marketplace:

* Market Makers (MM) - These are the players who provide liquidity in the marketplace. This means that they are required to buy when nobody else is buying and sell when nobody else is selling. They make the market.
* Electronic Communication Networks (ECN) - Electronic communication networks are computerized order placement systems. It is important to note that anyone can trade through ECNs, even large institutional traders.
* Wholesalers (Order flow firms) - Many online brokers sell their order flow to wholesalers; these order flow firms then execute orders on behalf of online brokers (usually retail traders).

Each market participant is recognized by the four-letter ID that appears on level II quotes. Here are some of the most popular ones:

UBSW UBS Securities
LEHM Lehman Brothers
DBAB Deutsche Bank Alex. Brown
MLCO Merrill Lynch
JPHQ JPMorgan
MSCO Morgan Stanley
GSCO Goldman Sachs
BEST Bear Stearns
FBCO Credit Suisse First Boston
SBSH Salomon Smith Barney
NMRA Nomura Securities
SGAS SG Americas Securities

The Ax

The most important market maker to look for is called the ax. This is the market maker that controls the price action in a given stock. You can find out which market maker this is by watching the level II action for a few days - the market maker who consistently dominates the price action is the ax. Many day traders make sure to trade with the ax because it typically results in a higher probability of success.

Why Use Level II?

Level II quotes can tell you a lot about what is happening with a given stock:

* You can tell what kind of buying is taking place - retail or institutional - by looking at the type of market participants involved. Large institutions do not use the same market makers as retail traders.
* If you look at ECN order sizes for irregularities, you can tell when institutional players are trying to keep the buying quiet (which can mean a buyout or accumulation is taking place). We'll take a look at how you can detect similar irregularities below.
* By trading with the ax when the price is trending, you can greatly increase your odds of a successful trade. Remember, the ax provides liquidity, but its traders are out there to make a profit just like anyone else.
* By looking for trades that take place in between the bid and ask, you can tell when a strong trend is about to come to an end. This is because these trades are often placed by large traders who take a small loss in order to make sure that they get out of the stock in time.

Tricks and Deception

Although watching the level II can tell you a lot about what is happening, there is also a lot of deception. Here are a few of the most common tricks played by market makers:

* Market makers can hide their order sizes by placing small orders and updating them whenever they get a fill. They do this in order to unload or pick up a large order without tipping off other traders and scaring them away. After all, nobody is going to attempt to push through a 500,000 share resistance, but if a persistent 10,000 share resistance is there, traders may still think it is a beatable barrier.
* Market makers also occasionally try to deceive other traders using their order sizes and timing. For example, JPHQ may place a large offer to get short sellers on board, only to pull the order and place a large bid. This will force the new shorts to cover as day traders react to the large bid.
* Market makers can also hide their actions by trading through ECNs. Remember, ECNs can be used by anyone, so it is often difficult to tell whether large ECN orders are retail or institutional.

Level II can give you unique insight into a stock's price action, but there are also a lot of things that market makers can do to disguise their true intentions. Therefore, the average trader cannot rely on level II alone. Rather, he or she should use it in conjunction with other forms of analysis when determining whether to buy or sell a stock.

Long Explanation - Level 3

Level 3 trading is reserved for members of the National Association of Securities Dealers (NASD), which is composed of financial institutions that act as stock market broker-dealers, also known as market makers. NASD is also now known as Financial Industry Regulatory Authority (FINRA).

Level 3 is a trading software platform for market makers. It gives these dealers access to information about competing market makers and their bid and ask prices that shape market activity.

Level 3 traders own inventories of a wide range of stock. Their job is to trade as many shares as possible and profit from the spread, which is the difference between bid and ask prices. Level 3 market makers enter bid and ask quotes, and execute orders.

Dealers benefit from Level 3 by having access to the most current and comprehensive market data available. The platform also allows them to be the conduit for market activity.

For a firm or individual to have access to Level 3, they must gain financial industry certification and become a NASD member. Different states require different licensing for broker-dealers, but most states require at least a NASD Series 63 license.

Level 3 displays on the dealer's screen the most current bids in one column and current offers in the next column. The user also has buttons and forms for entering quotes and executing trades instantly.

Resources

* http://www.ehow.com/about_6456922_level-3-trading-account_.html (Quick explanation)
* http://www.investopedia.com/articles/trading/06/Level2Quotes.asp (Long explanation, Level 2)
* http://www.answerbag.com/q_view/1897881 (Long explanation, Level 3)

[Blinton]

Bid, Ask, and Spread basics.

I think the Fool.com does a pretty good job of explaining bid, ask, and spread:

Could someone please explain what bid and asked prices are?

Think of an auction. The "bid" is the price closest to the last transaction that buyers are willing to buy at. The "ask" is the price closest to the last transaction that sellers are willing to sell at. You can also think of them as the market price of a stock--bid being the market price if you are selling "at the market" and ask being the price if you are buying at the market. The difference between the bid price and the ask price is called the "spread." It is a fee that the market maker pockets as payment for keeping the market liquid. Generally, you will only see bid and ask prices quoted for NASDAQ stocks. On the NY and American exchanges the spread is a more uniform 1/16 to 1/8 point.

OK, so what is the bid/ask "size" that I see in quotes sometimes for stocks trading on the NYSE and ASE?

The NYSE and other listed exchanges (ASE, Midwest, Boston, Pacific etc.) use "specialists" to match up the orders for a particular stock. The size of the bid/ask shows how many shares the specialists has available at those prices. For example:

Bid 14.25 x Ask 14.50, 37 x 90 <---- bid-ask size

This means that at the current moment, the specialist has offers on his books (bids) to buy 3,700 shares at 14.25 and offers (asks) to sell 9,000 shares at 14.50.

In general, a larger ask size than bid size means that at the moment, there are more sellers than buyers and thus downward pressure on the stock's price. This could change in an instant though, so it isn't that helpful unless you're a market maker or very sophisticated trader.

On the Nasdaq, because there isn't one specialist balancing a book of orders like there is on the more "organized" exchanges, the size of the bid/ask means almost nothing.

Resources

* http://www.fool.com/FoolFAQ/FoolFAQ0007.htm (pasted above)
* http://www.investopedia.com/articles/trading/121701.asp
* http://hubpages.com/hub/bid-ask-size

[Blinton]

Common Acronyms - Getting Started.

Below are some common acronyms you'll want to know before diving into the more advanced materials. I only provided a few since this list could get extremely long if we included everything.

A/D: Accumulate / Distribution line (chart indicator). http://www.investopedia.com/terms/a/accumulationdistribution.asp
EPS: Earnings Per Share. http://www.investopedia.com/terms/e/eps.asp
FLD: Float Lock Down. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50727775
FTD: Failure To Deliver. Related to Naked Short Selling. http://www.investopedia.com/terms/f/failuretodeliver.asp
MM: Market Maker. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50724699
P/E: Price per Earnings ratio. http://www.investopedia.com/terms/p/price-earningsratio.asp
PPS: Price Per Share. http://www.ehow.com/how_4928002_calculate-per-share-common-stock.html
NSS (or NS): Naked Short Selling. Or Naked Shorting. http://www.investopedia.com/terms/n/nakedshorting.asp

If I missed any acronyms that you were looking for, please check out this enormous list on Investopedia:
http://www.investopedia.com/categories/acronyms.asp?viewed=1

[Blinton]

Monk's Original FLD Plays: EVCC, TUBR.

The original FLD plays speak for themselves. Below are Monk's FLD plays before CDIV, EIGH, and GRNO.

Monk's Original Float Lockdown Plays

TUBR

Company name: Tubearoo
Annotated chart: Tubearoo charts are difficult to find because the company isn't around any longer.
Original iHub board: http://investorshub.advfn.com/boards/board.aspx?board_id=8887&NextStart=48 (the ticker changed)
Monk's comments: TUBR about a year and a half ago... A completely useless company by all rights...not meant as a criticism to them... but nothing for revenues and in my opinion a poor business model... We locked up the float and took it from around .40 to $4.44 in 13 days... Keep in mind... we were all in for a long time prior doing exactly what we are now with CDIV... just locking up the float...

EVCC

Company name: Environmental Control Corp.
Annotated chart: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=47180502
Monk's comments: EVCC around the same time frame... another penny stock with a nice share structure... Are you ready for this... a one man company... he made catalytic converters in his garage... again... we locked up the float... we took this one to nearly $8.00 in two weeks... [after locking the float up for a long time]

Original Comment Source

Comments by Monk - Monk's Den board - Tuesday, November 24, 2009

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=43877492

[Blinton]

Monk's Current FLD Plays: CDIV, EIGH, GRNO.

As of Friday, May 28, 2010.

Current FLD Plays

Monk currently has 3 separate Float Lock Downs in play. At the time of this post, the current FLD plays are as follows:

CDIV

Company name: Cascadia Investments
Called at: $0.0007
Called on: 03/19/2009
Call post: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=36417696
iHub board: http://investorshub.advfn.com/boards/board.aspx?board_id=12076

EIGH

Company name: 8000 Incorporated
Called at: $0.008
Called on: 12/15/2009
Call post: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=44554162
iHub board: http://investorshub.advfn.com/boards/board.aspx?board_id=10071

GRNO

Company name: Green Oasis
Called at: $0.08
Called on: 02/26/2010
Call post: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=47118107
iHub board: http://investorshub.advfn.com/boards/board.aspx?board_id=532

Checking For Updates

Please check the Monk's Den iBox for the latest updates on all of Monk's FLD plays:

http://investorshub.advfn.com/boards/board.aspx?board_id=2052

[Blinton]

Deep Capture, The Movie.

This movie is a must see. It's a fantastic eye opener to the corruption occurring behind the scenes on Wall Street and in government. The movie is 45 minutes long, so it's not a quick watch. But it comes very HIGHLY recommended.

Here is the best place to watch the movie:

http://www.deepcapturethemovie.com/

Same movie, different website:

http://vimeo.com/4070761

[Blinton]

Float Lock Down (FLD) basics.

Posted by Cowboy - Monk's Den board - Thursday, March 11, 2010

When we talk about the float we are talking about shares that are freely traded on the stock market for a particular stock. The float is the outstanding shares minus any shares that are not available because they are restricted or are being set aside for company purposes.

When we buy and hold stock we are taking shares out of the market and in that process reducing the float or any available shares that may be sold.

When we have effectively bought all of the available shares then the stock is in “Float Lock Down” as Monk states in his posts.

Any shares purchased after the Float Lock Down point is reached are shares the market makers do not have so they are either shares that are sold short or they are naked short shares, shares that do not exist.

When this event occurs then the market makers job is to try and free up shares or take the market on that stock to a higher level in order to create sales of shares.

If the market makers try to free up shares then they will do what we call a “shake”. They will take the stock up then short it down in order to create panic or take out stop loss orders and/or take out those individuals who have mental stops in mind.

If people do not sell and hold stock for a higher valuation then the market makers will determine after a period of time to take the stock back up and try to encourage more selling.

The market is based on supply and demand. If the demand outweighs the supply then the market makers try to create an atmosphere for the seller. If there are no sellers then they take the stock to a point where people will sell.

And that my friends is where it gets exciting.

Original Post

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=47712128

[Blinton]

Naked Short Selling (NSS) basics.

Prerequisites

I recommend reading up on Short Selling before trying to understand Naked Short Selling:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=50725460

Quick Explanation

Naked short selling, or naked shorting, is the practice of short-selling a financial instrument without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "failure to deliver".

Is Naked Short Selling Even Legal

Naked short selling is illegal in most cases. Many countries have outlawed the practice. And even in the countries that still allow naked short selling, it is only permitted under specific circumstances.

In theory, if you are a market maker who needs to provide shares for a stock which is lacking sellers, then you can temporarily and legally naked short sell to create liquidity and stability in the marketplace. And even then you're supposed to give your word that you'll obtain the required shares as soon as possible, and at the very least within a set timeframe, otherwise you're violating the law.

Possible Abuse and Manipulation

In recent years, a number of companies have been accused of using naked shorts in aggressive efforts to drive down share prices, sometimes with no intention of ever delivering the shares. These claims focus on the fact that the practice allows an unlimited number of shares to be sold short.

An overly-simplified explanation is that naked short selling enables abusers to drive down a company's stock by offering an overwhelming number of virtual shares. These companies generate overabundant supply, thus depleting demand, resulting in the stock price artificially drifting downward. And to add to the mess, these unnatural downward shifts can also create confusion and fear in the long stock holders resulting in a snowball effect as they prematurely exit the stock. All the while, the naked short sellers illegally make money hand over fist as the price falls.

Mass naked short selling can be devastating to micro-cap stocks where volume and market cap are low - making them prime targets for manipulation. The manipulators can play the odds because micro-cap typically fail more often than not. And over time they've also created a playbook of nasty tricks to help drive down a healthy stock rise after the manipulators have become over leveraged in an unexpected losing short position.

To Be Continued

There is a lot more to Naked Short Selling than this, and we'll eventually go into much greater detail. But for now that's all you'll need to know as far as the basics are concerned.

Resources

* http://en.wikipedia.org/wiki/Naked_short_selling
* http://www.investopedia.com/terms/n/nakedshorting.asp

[Blinton]

Short Selling basics.

A Quick Explanation From Investopidia

When you short sell a stock, your broker will lend it to you. The stock will come from the brokerage's own inventory, from another one of the firm's customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. Sooner or later, you must "close" the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money.

My Overly-Simplified Explanation

Five steps for short selling:

1) Setup margin on your trading account so you're able to borrow from your discount-broker.
2) Find a stock you think is going to fall. We're going to short in order to make money off of the downward action.
3) As you initiate a transaction to short the stock, your broker will borrow shares from someone holding the stock and lend them to you. You've basically wrote an IOU. At this point you've virtually "sold" shares without ever owning any, crazy right?
4) After the stock goes down enough and you're happy with your profits, it's time to end the trade. So you buy some actual shares - otherwise known as a cover - to make up for the shares that you borrowed earlier.
5) You give the actual shares to the person that you borrowed shares from, and you get to keep the difference as profit. Now you're rich rich rich.

As an example

Let's say you borrow 100 shares priced at $5 (i.e. start a short position). Then after the stock falls to $4 you actually buy 100 shares (i.e. cover you're short position). Next you give the $4 shares that you just bought to the guy you borrowed shares from so you're both even steven. Now you've just make a $1 profit off of the shares dropping a $1, and the sucker that you borrowed the shares from was none the wiser. Makes sense now?

The Short Selling University at Investopedia

This investopedia tutorial is very helpful if you want to learn more about short selling.

http://www.investopedia.com/university/shortselling/

Table of Contents
1) Short Selling: Introduction
2) Short Selling: What Is Short Selling?
3) Short Selling: Why Short?
4) Short Selling: The Transaction
5) Short Selling: The Risks
6) Short Selling: Ethics And The Role Of Short Selling
7) Short Selling: Conclusion

Additional Resources

http://en.wikipedia.org/wiki/Short_(finance)

[Blinton]

Market Maker (MM) basics.

Quick Answer

What is a Market Maker?

You probably take for granted that you can buy or sell a stock at a moment's notice. Place an order with your broker, and within seconds, it is executed. Have you ever stopped to wonder how this is possible? Whenever an investment is bought or sold, there must be someone on the other end of the transaction.

If you wanted to buy 1,000 shares of Disney, you must find a willing seller, and visa versa. It's very unlikely you are always going to find someone who is interested in buying or selling the exact number of shares of the same company at the exact same time. This begs the question, how is it that you can buy or sell anytime? This is where a market maker comes in.
A market maker is a bank or brokerage company that stands ready every second of the trading day with a firm ask and bid price. This is good for you, because when you place an order to sell your thousand shares of Disney, the market maker will actually purchase the stock from you, even if he doesn't have a seller lined up. In doing so, they are literally "making a market" for the stock.

How do Market Makers make their Money?

Market Makers must be compensated for the risk they take; what if he buys your shares in IBM then IBM's stock price begins to fall before a willing buyer has purchased the shares? To prevent this, the market maker maintains a spread on each stock he covers. Using our previous example, the market maker may purchase your shares of IBM from you for $100 each (the ask price) and then offer to sell them to a buyer at $100.05 (bid). The difference between the ask and bid price is only $.05, but by trading millions of shares a day, he's managed to pocket a significant chunk of change to offset his risk.

Long Answer

Who Are Market Makers?

Many option traders and stock traders ask, who is buying from me when I am selling and who is selling to me when I am buying? What happens when nobody wants to buy a stock or stock option which I am selling? In a normal, liquid market, there are usually someone queuing to sell a stock or stock option when you are buying and someone queuing to buy when you are selling. However, there are times when nobody is queuing to sell when you are buyng and times when nobody is queuing to buy when you are selling, so, how is it that you are still able to buy or sell your stocks or stock options smoothly? This is where Market Makers come in.

A "Market Maker" can be an individual or representatives of a firm whose function is to aid in the making of a market, by making bids and offers for his account in the absence of public buy or sell orders in order to ensure market transactions are as smooth and continuous as possible. When an option trader places an order to buy a stock option which nobody is queuing to sell, market makers sell that stock option to that option trader from their own portfolio or reserve of that particular stock option. When an option trader places an order to sell a stock option which nobody is queuing to buy, market makers buy that stock option from that option trader and adds it to their own portfolio and reserve. In doing so, market orders are continuously moving, eradicating sudden surges and ditches due to buying and selling imbalance.

ou'll most often hear about market makers in the context of the NASDAQ or other "over the counter" (OTC) markets. In contrast to the "Specialist" system that the NYSE employs, NASDAQ has no individuals through which a stock's transaction must pass. Instead, all transactions pass from one market maker to another. In the market maker system, market makers compete with one another to buy or sell stocks & options to investors by displaying quotes and are obligated to buy and sell at their displayed bids and offers. An investor may be dealing with several market makers at once if that investor is placing a very large order which cannot be filled by the inventory of one market maker. An option trader may also deal directly with individual, specific market makers through Level II Quotes.

In reality, Market Makers make up the actual "market". When a stock or option trader places an order with a broker, that broker fills that order by buying or selling with the Market Makers.

Another way of understanding what Market Makers do is that Market Makers are like the book makers in Las Vegas who set the odds and then accomodate individual gamblers who select which side of the bet they want. A Market Maker supplies a bid and ask price and then let the public decide whether to buy or sell at those prices. As an options trader, Market Makers are master position traders who aims to establish and profit from every low risk and risk free opportunities.

Advantage Of The Market Maker System

In NYSE, there is one official employee of the exchange to act as market maker for each security. In the Market Maker System, many market makers are assigned to every security. As every Market Maker effectively acts as a "Specialist" like in NYSE, there are effectively many specialists for each stock. This creates a decentralised market place where liquidity and volatility varies. This improves overall liquity and makes market manipulation much more difficult.

What Happens If There Are No Market Makers?

Market makers have given option traders quite a negative impression as people who buys at very low prices and sells at very high prices just when an option trader is desperate to buy or sell a position. Let's see what happens when we remove market makers from the markets.

XYZ stock is an extremely bullish stock who has just announced fantastic earnings. You want to buy XYZ stocks but investors who are already holding XYZ stocks are not selling. In order to attract a seller, you begin to bid higher and higher for XYZ stock until at last, a seller is moved to selling the stock. This price could already be extremely high.

Consider again a sudden bad news released from XYZ company, creating a rush to sell XYZ stocks. You are queing to sell but nobody is buying. In order to attract a buyer, you start to push the price lower and lower until at last, the price bottoms out worthless.

As we have seen, in an imbalanced buying and selling situation, market makers play an extremely important role of creating liquidity for prices in between in order to eradicate huge gap ups and downs and to ensure a liquid market for all.

How Does Market Makers Make A Profit?

Market Makers are not paid commissions to buy and sell stock options, so how do they make a profit? Well, most institutional market makers simply earns a salary from the marker maker firm that they represent. Market Maker firms like Goldman Sachs and Morgan Stanley, commit their own capital to maintain an inventory of stocks and options and represent customer orders. On the trading floor, Market Makers make money by maintaining a difference between the price he would buy and the price he would sell a particular stock or stock option. This difference in price is known as the Bid-Ask Spread. A bid-ask spread ensures that if an order to buy and an order to sell arrives simulataneously, the Market Maker makes the difference in Bid-Ask Spread as profit.

Example : XYZ May30Call option has a bid price of $1.10 and an ask price of $1.30. Market Maker John recieves simulataneously an order to buy and an order to sell. Market Maker John buys that May30Call option from the seller for $1.10 and then sells that same May30Call option to the buyer for $1.30, thus making $0.20 in profit completely risk-free.

However, when a Market Maker is not confident that a stock or stock option can be so quickly bought and sold, due to the fact that there are only very few option traders or stock traders trading that security, then there is a risk that a stock or stock option which that Market Maker buys can only be sold when the market price is lower than the prevailing price, therefore resulting in a loss. In order to protect against such a risk, Market Makers, widen the bid-ask spread so that the transaction remains risk free to him over a larger price range.

Conversely, when Market Makers are selling highly active option contracts, they frequently raise the price of the option through increasing the implied volatility of that particular option contract. That results in the Volatility Smile or Volatility Skew.

Apart from market making, market makers also make profits from options arbitrage. An arbitrage opportunity presents itself when a severe deviation from Put Call Parity occurs leading to options pricing discrepancies which can be locked in completely risk-free using options trading strategies such as the Box Spread and the Conversion & Reversal Arbitrage. As any possible profits from arbitrage is extremely low, only Market Makers who need not pay a broker commission can actually make any money out of it.

How Does Market Makers Protect From Risk?

As you can see by now, Market Makers are like you and me, buying and selling stocks and stock options. Doesn't that expose them to certain directional risks? Yes, even though market makers endeavour to be able to buy and sell simultaneously in order to benefit risk-free from bid-ask spread, such ideal situation rarely exist in stocks or stock options which are not extremely liquid. Most of the time, Market Makers end up owning stocks or stock options and that exposed them to directional risk.

Example : Market Maker John buys XYZ May30Call option from a seller for $0.80. If XYZ stock falls before Market Maker John manages to find a buyer for it, Market Maker John stands to lose money as the call option decreases in price.

Market Makers protect themselves from directional risks through "Hedging" and flexible use of synthetic positions. A Market Maker hedges his inventory through buying or selling additional stocks or stock options in order to achieve a position whereby stocks and options falls as much as the other rises in order to maintain the overall value of the account. This is what we call a "Delta-Neutral" position. A Market Maker's positioning strategy, especially in making markets for stock options, is extremely complex and requires to the second calculation and execution. It is because of this complexity in balancing all kinds of risks that some new Market Makers actually lose money to the market despite all the privileges of being a Market Maker.

Risks That Market Makers Face

Market Makers for stock options trading faces 6 forms of risks which, in fact, all option traders face :

1. Directional Risk / Delta Risk
Directional or Delta risk is the risk that a stock option price will turn against the market maker as the underlying stock value changes. A Market Maker consistent attempts to hedge this risk by going "Delta-Neutral".

2. Gamma Risk
Gamma risk is the risk that the delta value of a stock option may change over time. This consistently threatens to tip a Market Maker's sensitive Delta-Neutral position to become of positive or negative delta, thereby exposing a Market Maker to directional risk. Gamma risk can be overcome by taking Gamma Neutral Positions.

3. Volatility Risk
An increase in implied volatility in the market increases the premium value of stock options while a decrease in implied volatility decreases the premium value of stock options due. This is known as the Vega risk. Market Makers who hold an inventory of stock options could sustain a loss if implied volatility decreases.

4. Time Decay Risk
Time Decay or Theta risk is when stock option premium reduces as expiration date draws nearer even if the underlying stock does not move. A Market Maker with an inventory of long stock options can sustain a loss over time even if the underlying stock does not move.

5. Interest Rate Risk
Stock options, especially long term ones, are affected slightly by changes in interest rates. This change, although insignificant to most option traders, is significant to Market Makers who hold very large inventory of stock options. This risk is represented by the Options Rho.

6. Dividend Risk
Dividends declared reduces call option value as holder of the call option do not recieve the dividends. Such risks are usually hedged by Market Makers by buying the underlying stock ahead of it's dividend declaration. The dividends recieved then hedge against the decline in call option value.

Unlike independant option traders, Market Makers cannot sell off their inventory of stock options simply because they know these stock options are going to go down in value due to any of the above risks, that is why hedging is such an important skill to Market Makers.

How Does One Become A Market Maker?

One can only become a Market Maker by joining one of the Market Maker firms like Goldman Sachs or through a clearing agency or brokerage firm which is a member of NASDAQ. Most firms provide on the job training and requires applicants to have at least the following criteria :

1. A Bachelor's Degree

2. Excellent numeracy and analytical skills.

Most market maker firms also have entry examinations in order to ensure that applicants have the required numeracy and analytical skills. In fact, being a market maker requires a lot more than just being good with numbers as it also requires extraordinary mental strength to be a market maker.

Another way of becoming a Market Maker is by owning a trading pit in NASDAQ or LSE itself... something that is out of reach for most individuals.

Resources

* http://en.wikipedia.org/wiki/Market_maker
* http://www.investopedia.com/terms/m/marketmaker.asp
* http://www.sec.gov/answers/mktmaker.htm
* http://beginnersinvest.about.com/od/beginnerscorner/l/blmarketmakers.htm (quick answer)
* http://www.optiontradingpedia.com/market_makers.htm (long answer)

[Blinton]

Float basics.

Quick Answer

The float is the total number of shares publicly owned and available for trading. It's calculated by subtracting restricted shares from outstanding shares. For example, a company may have 10 million outstanding shares, but only seven million are trading on the stock market. Therefore, this company's float would be seven million.

Long Answer

Restricted and Float

When you look a little closer at the quotes for a company, you may see some obscure terms that you've never encountered before. For instance, restricted shares refer to a company's issued stock that cannot be bought or sold without special permission by the SEC. Often, this type of stock is given to insiders as part of their salaries or as additional benefits. Another term that you may encounter is 'float'. This refers to a company's shares that are freely bought and sold without restrictions in the public. Denoting the greatest proportion of stocks trading on the exchanges, the float consists of regular shares that many of us will hear or read about in the news.

Authorized Shares

Authorized shares refer to the largest number of shares that a single corporation can issue. The number of authorized shares per company is assessed at the company's creation and can only be increased and decreased through a vote by the shareholders. If at the time of incorporation the documents state that 100 shares are authorized, then only 100 shares can be issued.

Now just because a company can issue a certain number of shares doesn't mean that it is going to issue all of these shares to the public. Typically, companies will, for many reasons, keep a portion of the shares in their own treasury. For example, CTC may decide to maintain a controlling interest within the treasury just to ward off any hostile takeover bids. On the other hand, the company may have shares handy just in case it wants to sell them for excess cash (rather than borrowing). This tendency of a company to reserve some of its authorized shares leads us to the next important and related term: outstanding shares.

Outstanding Shares

Not to be confused with authorized shares, outstanding shares refer to the number of stocks that a company actually has issued. This number represents all the shares that can be bought and sold by the public as well as all the restricted shares that require special permission before being transacted. As we already explained, shares that can be freely bought and sold by public investors are called the float, and this value changes depending on if the company wishes to repurchase shares from the market or sell out more of its authorized shares within its treasury.

Let's look back at our company CTC. From the previous example, we know that this company has 1000 authorized shares. If they offered 300 shares in an IPO, gave 150 to the executives and retained 550 in the treasury, then the number of shares outstanding would be 450 shares (300 float shares + 150 restricted shares). If after a couple years CTC was doing extremely well and wanted to buy back 100 shares from the market, the number of outstanding shares would fall to 350, the number of treasury shares would increase to 650 and the float would fall to 200 shares since the buyback was done through the market (300 – 100).

Hold on a minute though - this is not the only way that the number of outstanding shares can fluctuate. In addition to the stocks it issues to investors and executives, many companies offer stock options and warrants. These stock options and warrants are instruments that give the holder a right to purchase more stock from the company's treasury. Every time one of these instruments is activated, the float and shares outstanding increase while the number of treasury stocks decrease. For example, suppose CTC issues 100 warrants. If all these warrants are activated, then Cory's Tequila Corporation will have to sell 100 shares from its treasury to the holders of the warrants. Thus, by following the most recent example, where the number of outstanding shares is 350 and treasury shares is 650, the exercise of all the warrants would change the numbers to 450 and 550 respectively, and the float would increase to 300. This effect is known as dilution.

Why Is It Important?

Because the difference between the number of authorized and outstanding shares can be so large, it's important that you realize what they are and which figures the company is using. Different ratios may use the basic number of outstanding shares while others may use the diluted version. This can affect the numbers significantly and possibly change your attitude towards a particular investment; furthermore, by identifying the number of restricted shares versus the number of shares in the float, investors can gauge the level of ownership and autonomy that insiders have within the company. All these scenarios are important for investors to understand before they make a decision to buy or sell.

Resources

* http://en.wikipedia.org/wiki/Float_(finance)
* http://www.investopedia.com/terms/f/float.asp (quick answer)
* http://www.investopedia.com/articles/basics/03/030703.asp (long answer)

[Blinton]

About the Monk's Den.

You'll find that many of the materials found on this board are related to the Float Lockdown (FLD) concept. I originally discovered this concept through the Monk's Den, a team-oriented investment group started here on iHub by no other than Monk himself.

The Monk's Den iHub Board:
http://investorshub.advfn.com/boards/board.aspx?board_id=2052

Don't forget to review everything in the Monk's Den "iBox" to find all their latest news, events, stock recommendations, and educational information.

[Blinton]

The Board Rules

Feel free to contribute to the resources found on this board but please keep posts STRICTLY on topic. To ensure materials are quickly accessible to everyone, I ask that we completely refrain from the typical filler and banter found on most other boards.

Please ONLY post:

* Helpful links
* Recommended books
* Useful articles and videos
* Educational posts
* Thorough research
* Annotated charts

Please do NOT post:

* Any questions (send them privately or post elsewhere)
* Repeat content
* Friendly banter
* Praise and thanks
* Off topic discussions
* Uneducated opinions
* Fluff
* And the likes

Not to be unfriendly, but quick access to helpful materials is the entire point of this board. And adding a bunch of unnecessary filler content does not really help us reach the goal of quickly accessible content.

Thank you!

[Blinton]

Welcome everyone.

This board is intended to help people quickly seek and review educational posts, articles, links, and materials related to investing.

Disclaimer:

Almost all of the information you'll find here is not of my own creation, and I take no credit for the majority of this content. I've merely assembled random bits and pieces of information that I've discovered along my educational journey in investing. I also do not claim to be some sort of investing guru, I still have much to learn, so please take everything posted on this board with a grain of salt.

Many thanks and enjoy!