Replies to post #161927 on DD Support Board and Research Team

[tedpeele]

Thanks. What if the following is true?

1. Some people who get a partial buy will raise their bid in order to complete the sale.

2. Some people who get a partial sell will lower their ask in order to complete the sale.

I believe both of those are true statements.

If they are, then the act of an mm computer 'backing away' or only filling partially in order to 'encourage' a person to complete his order at a different price where there is volume waiting would seem to have some logical basis.

Would you agree?

IMO there is nothing wrong with an mm computer algorithm programmed to do exactly that. He hasn't made a person buy or sell, or change his price. He has providing a misleading picture of the 'true' supply and demand but doesn't this happen also when we see 10,000 on L2 instead of the actually (usually much larger) number of shares. And don't retailers themselves do that by putting up fake walls, etc.. (although there is a critical difference--the retailer can't change after someone else places there order), or to some degree if they 'paint' the price at the end of the day?

In the end the retailer decides how many shares he is willing to buy or sell and at what price--it is either filled or not regardless of what the mm is displaying.

[integral]

I rarely traded against retail. But sometimes I had to out of the trading account. I just wanted to give an execution for retail, I didn't have time for the broker to come to my office and yell at me. I really traded Agency and put order flow into the market. Many times I called MMs outside the inside quote to see what they got. If they are next behind the inside, I would bid or offer and see what I get. I knew they had a reason to be there.

Idgets think, "oh the stock is $0.009 and then it goes to $0.20". That is so untrue. They are just telling me they are willing to make a deal.