The Jailhouse

[Phil(Hot Rod Chevy)]

Bob,

The way I undrstand it, The MMs and specialists were set up to maintain an orderly market.

IOW, when you wanted to sell they would buy and when you wanted to buy, they would sell.

To process a buy transaction, they needed to have some inventory. If they had no inventory, they would have to find some.

Therefor, if there were more buyers than sellers, the price of a security would rise.

Obviously, the opposite would be true.

But, IMHO the ability of the MMs and specialists to short rather than sell inventory on the rise, and use any minute reason to tank the price, causes volatility.

Ever notice that when bad news comes "after the bell" the stock opens way lower the next morning? Before anyone has a chance to dump? Ever wonder why? Because they have the upper hand and don't want you to be able to take money from them.

I liken them to game wardens. Game wardens hunt hunters. Granted, they also mainly hunt violators. But they use every trick at their disposal to make you a violator. I have encountered the assholes, so I know.

MMs and specialists are our enemies, not our friends. They trade against us, not for us. It is their jobs to take money from us. That's how they make the millions they make. Remember, they make money whether you buy or sell.



Have fun,
Phil