pigT...
typically, to make a market, you need buyers and sellers...
The Market Maker's duty is to make the market. The MM does not necessarily need to have a buyer at the time you sell for the MM to buy your shares. The MM holds those shares and then sells them to another throughout the day to balance their books at the end of each trading day. That is where the spread comes in. Because of their exposure and risk, they apply a spread between Bid and Ask. That is their payment for making the market for that equity (their VIG). That is also why you will have an MM on the bid AND the ask throughout the day. They have shares flying around all day, and their mission is to balance out at the end of the day. Sometimes they do not balance out, and that is where an MM can legally short a stock. Soemtimes they have to carry over shares they sold until the next day, when they need to cover those shares.
This is how it should work. Not always that mechanical. Because of their leeway in how they make the market, they can sometimes manipulate the market in their favor.
That is why many scream EVIL MMS!!!!!!!
Dan
Is this a good Stock?
Anything I say in the post above is my OPINION only. (Ne buvez pas l'kool-aide.)...and don't be a MARKEY.
