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Re: None

Monday, 02/22/2010 2:11:45 PM

Monday, February 22, 2010 2:11:45 PM

Post# of 79952
IMPORTANT
Some ways MM's entice sellers:
1. Run the stock up with a "tight spread" in a fast market, then "open" up the
spread to slow down the buying interest. After it has "cooled off" for a little
while lower the offer below the last trade right after a small piece trades on
the offer then tighten the spread so that the sellers feel they can take a
"quick profit" by "hitting the bid" on the tight spread. Once the selling
starts the MM's will walk it down quickly by only making small prints on the
way down with the tight spread.

2. Another way is by running the stock up in the morning, averaging up their
short then use the above technique to walk it down in the afternoon. Hopefully,
after doing this for several days, it will demoralize the buyers. The volume
will dry up and the sellers will materialize thinking that the game is over.
Contrary to popular opinion, MM usually Do Not Cover in Fast moving markets
either Up or Down if they are short. They Short More. They usually try to cover
after the frenzy is out of the market. There are many other techniques they use
but the above are the most popular.

Most MM's don't have a clue as to the value of a Company until they get
trapped.