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Re: JMillio post# 45819

Wednesday, 06/12/2013 1:26:55 PM

Wednesday, June 12, 2013 1:26:55 PM

Post# of 380528
The MM's do this with all stocks, as a stock makes a run they don't always have enough shares to satisfy buyers so they borrow shares, as Ameritrade or others can't just say nope I am out of shares and aren't selling you any. The mm's borrow shares between themselves to cover the volume, they then need to purchase shares to cover those borrowed, preferably at a price as low as possible. Hence a little walk down to get sellers to let loose some shares out of fear, meanwhile the mm's just made 15% as the stock shot back up, they now have shares to replace the borrowed shares and have made money doing so.

Not a perfect explanation, but I am trying to get across the idea that this isn't just an individual or organization specifically shorting because they think the stock is going down. It is because mm's had to borrow shares to fulfill the buys on the way up.

Would be nice if others clarified better then I did. :)