Replies to post #21530 on Muscle Pharm Corporation (MSLPQ)

[Odessa99]

Eucsstamticc, while you are technically correct with your post below, and while I have stated it similarly in the past, there's something I believe I can add in this area. With OTC stocks, there are two distinct groups here. There are individual retail investors, like you and I, and then there are the market makers (MMs). For OTC stocks, the MMs supposedly exist to serve an important function - keep a liquid and orderly market. They do this by trading for their own account, in addition to representing our individual orders that have been placed. But often, they disrupt and confuse (because they can). Since they have a profit motive (they are employees at trading desks, with performance targets), they will prey upon the fear and greed of retail investors/traders. Think of them as a sort of OPEC group, where supposedly they will keep a fair price for oil, because they are competing with each other. But in reality, they can raise or lower the price per barrel for oil because they are an oligopoly with control over a substantial part of the oil market. So back to the buy/sell imbalance. On a day like yesterday, when 'sells' outnumbered 'buys' in a big way (tens of millions of shares), MMs bought many more shares than they sold. Examples of transactions where a retail investor sold and a market maker bought would be a market sell order, or a limit sell order with a limit price below the then-current bid (which would be guaranteed to execute as long as the number of shares available at that bid price were available). So, for example, if the only order that executed in the entire day was that I sold 100k shares, with a limit order at .017, when the best bid was .018 for 200k shares, the stats for that day's trading would show an imbalance of sells/buys where 100% of the transactions (my trade) were sells. Here's the part where my theory comes in. When 10s of millions of shares are traded in a given day for an OTC stock, and the dollar value of those day's trades are at or near one million dollars, and the 'sold' shares far outweigh the 'bought' shares, and the price does not drop by a large percentage, the indication is that the MMs are more than happy to gobble up vast quantities of shares. Otherwise, they (the MMs) would be dropping the share price substantially as the shares kept being 'sold' by the retail investors. Why would they be willing to do this? Either they were formerly in a very short position and had to cover, or they have the desire to be temporarily holding a great deal of these shares, as they see a substantial share price jump on the horizon. I believe that the explanation for this sales imbalance is mostly the latter. As always, simply my opinion.

You do realize that sells always EQUAL buys right? This is a very simple concept.

You can not sell something without someone buying it.

you can not buy something without someone selling it.

MSLP