You hear much talk about the float and how it has traded and why the issue (generally speaking) doesn't move.
This is how it works.
You have O/S and the float, which is generally the differance between restricted shares, thus float.
Float is shares in public trading venue.
Here is where most don't understand.
If your shares are held in a brokers account and not in your safe at home or in Certs, these shares can be traded over and over again at the MM wish or agenda.
Lets say you have 10 million shares in your brokers account..These shares can be trade 100 times over and over again, thus having a daily volume 100 million day. Of course there needs to be volume on buys and sells for this to play out, but generally this is the game.
This is called liquidity and above board and legal..
It always cracks me up when I read on message forums that the float is almost eaten up and we should move up.
When a stock moves is all about pressure.
When MM open up their trading desks in the morning, they see orders stacked up on the Bid/Ask and they work it accordingly..Reason why never to buy a stock at the open and one must wait until the mid-morning lull..This usually occurs around 10:15 to after 11:00.
This allows the MM to see where the playing field is..MMs do not watch news or any of the other venues that is so prevalent in stock discussion..They watch volume or lack there of and is this benchmark that controls their action.
There are over 15,000 issues they play in and they just don't have the time or care all of a company..Most MM never know what any of these companies do or their business model.
It's all in the pressure.
Have a good day
varok
