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Re: stockupgirl post# 56250

Thursday, 02/03/2011 10:35:41 PM

Thursday, February 03, 2011 10:35:41 PM

Post# of 86719
You've been selling too?

You're saying they sell you shares at one price, but then record the trade at a lower price? I think you're confusing two trades as one. That's how MMs make their money. You put in a buy at the ask. They've already got shares they paid less for, or they wait until someone puts in a sell at the bid. Then they buy his stock at say $.0051 and sell to you at $.0056. 10% profit, no risk.
That indeed is the essence of market making on the OTC. But they have to report both trades at the executed prices. However they may buy today from you and sell to someone else tomorrow, or vice versa, so you won't usually see both trades simultaneously.

The only thing they can't do is force someone to pay $.0056 or to sell at $.0051. They have to wait for willing traders. So they're not really "controlling" the price, but they are controlling the transactions that get executed. And unlike the actual exchanges (remember, OTC is just a quote and trade reporting service), they are under no obligation to assure a liquid market to execute any particular trade, even if you buy at the ask or sell at the bid.

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