DD Support Board and Research Team

[tedpeele]

One thing I've seen several times is the ask immediately move up when I place an order to buy at the ask. Maybe it will partial fill but the bulk of it isn't.

I assume that is a computer algorithm because people can't react that fast.

In a case like this the ask is 'fake' -- and I've interpreted it as a way for the market maker to help 'encourage' more buying. So it isn't really manipulation of the price. It's just a technique designed to help generate volume by 'teasing' the investor to buy the stock, and once that happens they are likely to raise their buy price -- which is then more likely to find a seller -- ie the end result is more volume.