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Re: RIVERDAVE68 post# 6761

Wednesday, 05/18/2011 11:33:30 PM

Wednesday, May 18, 2011 11:33:30 PM

Post# of 19899
great info there CVRG, here is an exerpt of the article you are referring to. This is exactly what the MM's have been doing for the last two weeks, especially ETMM:

"Price Manipulation: The act of artificially inflating or deflating the price of a security. In most cases, manipulation is illegal. It is much easier to manipulate the share price of smaller companies, such as penny stocks, because they are not as closely watched by analysts as the medium- and large-sized firms.
Now a few things you should know about market makers:
A market maker is not always trading with you and may trade against you creating a conflict of interest
A market maker can use hidden orders to avoid disclosing his real intention and to hide large volumes.
A market maker can use large fake order sizes to intimidate traders to run in the opposite direction. This is referred to as NITBB (no intention to buy bid) and NITSO (no intention to sell offer). For example if a market maker wants to run the stock down he will create a virtual institutional size ask putting fear in the traders that the stock is going down. The market maker will then fill his buys at the lower prices. The reverse may also be done.
A market maker may display a real size to show that liquidity is there to attract big interest
A market maker may use a fake order of a large size to hold the movement until he is done buying or selling his position.
A market maker can use his real identity or can hide behind an ECN (electronic communication network) depending on his intention. He can make an inside market on both sides and under different identities
Market makers may also trade back and forth among themselves, filling their own bids, creating a large decrease and spooking everyone who is uneducated into selling also.
The market maker (specialist) is granted various informational and trade execution advantages and has a lot of power. They can see everything. WHEN YOU ENTER A STOP LOSS ORDER THE MARKET MAKERS CAN SEE THEM! You may notice from time to time a stock hit a short term low and then move up again. Market makers will do everything in their power to hit the stop losses to build up more shares for their account if they believe the stock will rise again. A stop loss order becomes a market order when it is triggered. If the volume of the bids are low your stop loss will trigger a much lower sale price and bring the stock down with it (referred to as slippage).

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