Fannie Mae-No Politics (FNMA)

[Zargis]

I have labeled my answers in accordance with your numbering:

1: Market Managers pretty much just take bids / asks and match them. At certain times, in any stock, they do make corrections, BUT, it is not really anything unnecessary. An example would be resolving cancelled orders, or putting through orders that for some reason did not go through earlier etc.
Market Managers also determine how quickly the price indicator will move vs volume etc.

While it is very possible that these entities abuse their power and do manipulate, I cannot say 100% that they do, though I wouldn't put it past them, it makes sense. I am not an advocate claiming this. Someone a while back did post a very lengthy article about market managers and links to such though.

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Rather than Market Managers, I would look towards large funds moving money and manipulating stocks. Such as; Hedge Funds, Mutual Funds, or just plain ol' rich people with some knowledge. Even cramer of mad money specifically said he could (and has) manipulated stocks in the past by just pumping / dumping 5-10 million dollar loads.

Back in May, in ran up because so many people pumped it, and while some of it is true, people expected overnight results due to this pumping. Doesn't happen. So, when the negative news hit en-mass dumping ensued. Likely because the people who pumped to begin with (hedgies etc.) sold most if not all of their holdings (30-50million shares or some other large amount) and retail rightfully panic sold afterwards.


2: oh, guess I already partially answered this one above. There are Algorithms / HFT whatever you want to call them, which are automated trading systems that buy, sell, short and cover based on current trends in a large expanse of fields. (both actual news headlines and actual facts as well as based on current retail momentum)
Hedge funds and other entities use these algorithms to control the market in many ways, but primarily, the idea is to buy and then sell with a profit of pennies per trade even. Doing that all day long adds up, so as long as it CAN win a trade, it will.

Programmed machines move much faster then we can buy / sell...

Also, my theory is that to manipulate even further they create bids / asks (both sides) at low numbers, all-or-none orders of 5, 10, 20 etc. This would allow them to not buy other hedge funds orders if there were others potentially making 'fake' walls in the same manner. (low volume bids / asks)


(Its possible since it is much cheaper due to how much buying and selling they do, and quite frankly, if I recall correctly that some if not all of these hedge funds etc. pay a fee to trade, but not per trade like we do)



3: Consider even a 50 cent gain per trade, all day, with 5 trades per second on this ticker. (conservative I feel...)

0.50 * 5 = $2.50 * 60 seconds = $150.00 * 60 Minutes = $9000 * 6.5 hours = $58,500

This is based on them making $2.50 per second all day long. Those low numbers add up, they could make half of that and still be doing fairly well for very minor influences. Keep in mind, these funds are probably throwing around much much more money and making much more per converted second.

Also, these algorithms could potentially see news within seconds of it hitting in most cases... so much faster than any human could find and comprehend. If bad news hits it will be the first to buy / sell.


Hope that helps you understand. This is pretty much all my opinion, I've learned some of this from history channel or other financial shows, other information I've formed my own opinion of or learned while trading / posting here from reference links.

-Z

I've been following FNMA since mid-May and I have some questions for everybody:

1. If this is truly controlled by the MMs, and, also, if they want to push the PPS down in order to get more shares, then why did "they" let it run up to $5.44 back in late May? That seems a paradox to me. Was it a test to see how high the price could go?

2. And how do they really control the PPS? If they control the Ask and the Bid through their algorithms, they must be buying and selling constantly? I realize they have margin accounts and can buy/sell at will but I still don't see how that really works.

3. In addition, if they truly control the PPS and they know "news" or information that we don't know, why are they constantly playing their algos - just how much profit could they be making? constantly flipping, flipping and flipping.

Answers anyone?