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MaxPowerLove$Ihub

12/30/10 2:21 PM

#7285 RE: getthere #7278

I used to have the same question and I'm sure that there are many out there also have this very same question...It's just MM manipulators game...controlling the outbreak or (sudden breakout)...That way they could avoid potential situation like ..unwanted shorting...I have learned this over the years...and from a friend of a friend who had worked in the industry for years...

Imagine if the float is locked...then suddenly you have all the buyers asking their brokerages that they want to buy a specific stock...Then the Brokerages will instruct MMs to buy the stock...MMs, however, couldn't refuse to fill the buy order (yet they know that there are no inventory)...So, when a stock let say goes from .0002 to .0008 within a couple of hours (due to a huge demand)...when buying and selling cool down (even if buying & selling stall of only a few minutes)...MMs will take the opportunity to throw out a few small buy or sell orders @ the bid price...trying to trick investors that the PPS is falling back down, so imagine if one investor falls for this strategy, then the next guy in fear would likely do the same...so this is how you caught a panic sell...and this also explain why many stock shots up so fast in just an hour or two...and immediately falls back down...(Do remember that MMs do have to covers...but either ways...doesn't matter if the PPS go up or down on a particular security, MMs will still make $$$ on transaction fees (costs) ).

- Go SREH