lowtrade

[lowtrade]

MM accepts a large block order and buys the shares from the seller...that's the first trade. He then sells the shares in small partials to retail at a small markup. He pays no commissions so it's very easy for him to make money on the deal. When the sale of the large block order is complete, he clears the total from his books as a sell.

What your trying to explain is the 2 tier OTC market front trading problem. The first order has to be a client order, tier 1 off market, not large open market order. Your correct, he buys low, sells higher. This could be buys low at the open market first or buys the client order low first. Depending on the sizes of the bid/ask stacks.

What I saw at FBEC 10/6 was a wash trade. 45 mil sell @ .0003 and (5) 9 mil buys @ .0004.
The only way trades can go thru; large 45 mil; to equal smaller (5) 9 mil; either order, is if the M&M is the wash traders broker. No way the electronic market order queue is going to have 5 equal sizes orders sitting waiting to be closed when a 45 mil order shows up, unless the orders are closed from his 1st tier account book, both buy & sell (his clients); then reported on the transactions to the open market.

Plus in this transaction the buys high came first, then the large 45 mil sell lower. So this isn't a straight M&M front trade. It went thru the opposite. Buy high, sell low. Had to be off market, then reported. The key is you can't find 5 equal sized orders ready to close in order. There's got to be unequal orders sitting in the, first in first out, open market order queues. defies the odds otherwise. You don't get burst trades from any other place then a M&Ms 1st tier order book.