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Re: dukejas54 post# 56465

Tuesday, 01/24/2012 8:03:18 AM

Tuesday, January 24, 2012 8:03:18 AM

Post# of 94541
Just because there's a (retail) sell, it doesn't mean there was a (retail) buy. This is why there are MMs. When we sell a stock, we are selling to an MM, when we buy, it's from an MM. That's why there is a spread of the Bid/Ask; MMs have to make money too, or they wouldn't be there and the market would be total chaos. We sell at the Bid and we buy at the Ask. It may seem different at times, but if you buy (seemingly) at the Bid, the Ask was actually dropped momentarily and the Buy brought the Ask back up before anybody noticed the drop. One investor does not sell directly to another investor. The market keeps liquidity because the MMs have an inventory of shares or need to build up an inventory.

Technically there is a buy for every sell, but it doesn't happen at the retail level. One day, the MMs will get a lot of shares and the price drops; this is a heavy selling day. Another day, the MMs will get rid of a lot of shares and the price rises; this is a heavy buying day. Simple supply and demand.

Never take my word for anything; I'm just some Schlub trying to make money, like everyone else. Sometimes, I'm right; sometimes, I'm wrong. Never trust your money to somebody else.