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Re: Mako Hunter post# 11184

Thursday, 12/02/2010 7:07:17 PM

Thursday, December 02, 2010 7:07:17 PM

Post# of 72584
Market Makers often have to go short when there is no actual selling party at the Ask they are posting on pink sheets/bb stocks; it's their function and duty as market makers to do that since that's what facilitates a market, being that they are market makers. In another words, when you buy stock at the ask, you are actually buying it from a market maker, everytime, If you don't know this, then you are ignorant (sorry, but it's true). Market makers post the orders of other parties wishing to sell their stock. If there are not any parties wishing to sell, the market maker must use its own shares to fill buy orders from parties buying at the ask. If they themselves do not have enough shares in their inventory to fill the order, they must short shares to fulfill the order, which they are OBLIGATED to do because they are market makers.

and now we have our super super 'knowledgable' people here who complain about shorters when they themselves are the ones who are forcing shares to be shorted by market makers when there is not a party wishing to sell at the moment.

Believe it or not, this stock is illiquid. If you don't understand the actual meaning of the term liquidity and how to applies to stocks, then go look it up, because I've seen it used inappropriately several times on this board. It refers to the number of participants involved in the day-to-day trading of a individual stock/shares traded of an individual stock. Yes, OTOW trades millions of shares, but that's because the price-per-share is so low. If the liquidity in this stock was higher, than it would take many more shares to move the price incrementally.

if people here actually took the time to learn how the back office operations of markets function, there would be less conspiracy remarks of shorters because those remarks are based on ignorance.

I hope this post is appreciated because this type of information is only gained from either years of experience, books that tend to be difficult to read, in a class that isn't free, or from actually being involved in the industry professionally (which judging from the posts here in general, this isn't the case; sorry but it's true).

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