BMAK behavior suggesting a short position?
When you see a market maker continuously support the bid, while staying the lowest on the offer, the below example is what could be happening.
BMAK borrows shares and puts them up for sale at .007, but doesn't show how many shares they're selling. (See side note A below) A buy comes in for 1 million shares at the asking price of .007.
Meanwhile, BMAK lowers the asking price to .0069 and puts in the highest bid, which lets say is .0067.
A retail investor who is unaware of what is taking place may see the ask is now lower than before and thinks the price is dropping, therefore they decide to sell 1 million shares at .0067. BMAK just covered a short position they initiated at .007 with the 1 million shares that a retailer sold to them at .0067, and pocketed $300. They can either use that $300 toward replenishing prior losses from failed shorting attempts, or use it to actually buy shares to accumulate a position little by little.
This happens throughout the course of a few days or weeks, until there is enough profit they've made, or enough shares accumulated. They will continue to do this as long as it is successful.
How to overcome this practice?
While BMAK is not the only market maker doing this, in the case of MJTK they appear to be the primary "abuser". Sometimes other market makers jump or undercut the bid/ask. As other entities/investors pick up shares throughout this "dance", if they hold their positions, it becomes harder and harder for BMAK to short and or accumulate shares because there aren't enough freely trading shares (which is what looks to be happening right now, thus the declining volume) and eventually something has to give. Pressure at the ask with some buying volume can put an end to BMAK's practice, as they wont be able to successfully short anymore because shares won't be dumping to the bid, but rather being purchased at the ask.
What would make buying pressure come in so BMAK would stop their current practice?
- News catalysts from the company or sector could trigger a surge in buying volume at the ask.
- A collective effort by smart investors with money, who have already accumulated large positions and understand what is taking place, could start applying pressure at the ask and trigger a short squeeze, or at least push BMAK off the ask for a while. I believe this is a more powerful way to increase overall value in the stock price. And I believe the float (freely trading shares) is being accumulated and held tightly, which will have a tremendous impact on price appreciation when and if buying pressure comes in because it will be hard to buy shares. (Basic low of supply and demand).
Side note (A)
A reason why BMAK doesn't show how much they want to sell at the ask during a time of shorting is because if they sense or see enough buying pressure coming in, they can choose not to let a 1 million share order go through at the ask, but rather just fill 10K shares and move off the ask so they don't end up with too large a short position and get forced to cover at a much higher price.
The above overview is just one scenario that could be taking place right now based on my observation of how MJTK is trading. For those that are patient through this "dance", I believe a much larger return on investment is in order.
Go MJTK
Rec
