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Re: HOLD4STEAK post# 50062

Tuesday, 05/22/2012 8:26:12 PM

Tuesday, May 22, 2012 8:26:12 PM

Post# of 232507
On the NASDAQ, OTC and BB, Market Makers are supposed to keep trades going, creating what's called "making a market".

If they have a buyer and a seller both with the same amount of shares, they'll do a cross and trades shares from the buyer and seller.

Mostly though they end up holding their own inventory whenever possible because they then can make the profit on the margin between the buy and sell price.

When they have no inventory and perhaps they are already lacking shares, they will sell shares they don't have, they sell short shares to make a market. If they are already short, they try to hold the price in range so it doesn't run away from them and they end up losing money on trades. My guess is that is what happened today.

I'm gone for the evening, good luck learning this stuff.