Pervasip Corp (PVSP)

[trupm007]

Reading Market-Makers Signals
See the signs and messages they send each other

Many traders believe that Market-Makers (MMs) will "signal" moves in advance buy using small amounts of buys or sells as "signals". 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 (or I am taking) the price down so I can load shares
400 Keep trading it sideways.
500 Gap the stock.

This is a theory put forth by a lot of penny stock traders. This is not a guaranteed trading method but can lend some insight to communications. It can pay to watch a few MMs of your favorite stock over several days or weeks to see if they follow these or other similar signals. That way, you can divine what they are going to do and jump in ahead of any move that may come.

Why signals? Why not just message or email?

One simple reason... calling/emailing one or more of the other MMs and telling them to "take the price down" or "I am going to gap the stock" would be 100% ILLEGAL. Collusion at it's finest. If caught, handcuffs could replace their Rolex for a trip downtown.

We've worked on OTC/Agency (Nasdaq and BB) desks and worked with many actual MMs. We can attest that many MMs will use certain signals. Some will use fake bids/offers to trick individual investors and day traders. They are still responsible for those bids/offers and would have to buy or sell there if their bid or offer is hit, but they post those to make others think they have an order or really want to buy or sell there.