Replies to post #169249 on CMKM Diamonds Inc (fka CMKX)

[hasher]

sorry, I don't have any names for you

[Sec 10]

Stockhound:

Nobody is "setting the price," as there is no centralized display of bid and ask. What you have are some number of open retail shareholder offers to buy and sell at various prices, and there may be significant mispricings in those orders. Broker dealers that cannot match orders in their in-house order book will route them to a MM like NITE, whose order book is likely larger, giving them a better chance at a matched execution for their customer.

As I said, mispricings may be common. A customer may be willing to sell at .00008. Another customer may be willing to buy at .0001, but there is no guarantee that that .00008 seller will get the .0001 execution, or that the buyer offering the .0001 will find the .00008 seller. Without central price discovery, both trades, if they are in different MM or Broker Dealer order books may just sit there unfilled. Since there is no central Level II, it is also impossible to estimate market liquidity at different price points.

Given the tanking volume, it is likely that most prints are simply small retail holders buying and selling between each other. There may still be, however, a CD holder or holders of large blocks asking a MM to represent them in selling their shares into the float as the long holders did with JEFF. They may set a minimum price they are willing to accept-say .00007, and Jeff will attempt to match trades at that price or higher, pocketing the spread if there is one. Commissions and fees are also involved in representation arrangements.

Once more: on any given matched trade there is no difference between the buy and sell price. If a million shares is printed to the tape at .0001, that means one person bought them for that price, and one sold them for that price.

Even before the suspension and the removal to the grey market, CMKX traded only as matched trades. The main difference, from a trader's stand point, is that PinkSheets allows their quotation platform to be used for these "one-legged pinks," That does provide a centralized best offer system and a level II liquidity line up. Even then, however, MM's were not trading this stock for their own accounts, eliminating the possibility of any substantive short position, much less the claimed "naked short."