InvestorsHub Logo

Mason805

10/04/06 1:49 PM

#15921 RE: utmostbastard #15827

I still don't buy into the short theory on pinks. A market maker correlates trades which means he takes both sides of the market, bid and ask and he usually makes profit from the spread. All the short conspiracy theorists are claiming that this is not how pinksheet and otc world works.

I just don't see how a bank that underwrites these pinks and otcs would continuously let itself get into a jeapordizing short position and have to "buy to cover at a higher price" thereby rewarding us small time investors.

It doesn't add up. Banks have huge risk management departments and you would think that if a bank made this "short mistake" once, it would definitely take steps to make sure it never happened again. These banks have traders and quants running their prop desks that have graduated from MIT and other Quantitative finance schools. They're not dumb.

I don't know, it makes for a great hype or pump to get everyone excited about the stock but it's just not pragmatic to think that an MM is suffering as everyone here at IHUB is making thousands.