Replies to post #139436 on Bebida Beverage Company (BBDA)

[mpeets]

BINGO ! Now someone asks the right question! It's about time!

HERE'S A FOR INSTANCE - Perhaps a person or fund or organization with 200 million shares to sell, gave the entire block to UBSS, and said this:

"Get us between .0025 and .0030 for this 200 million shares. FOR SURE. Take up to 30 days to complete this deal for us, OK?"

(200 million share,s times $.0025, is $500,000 dollars, which is why the seller is doing this.)

So you see what would happen, the MM puts out 20M shares a day, feeding them into the market slowly, at the preferred "ask" - while allowing the "bid" (retail marks like you and me) to absorb the shares while enthusiasm is high and growing. Not letting the price dip, while the shares are still being sold. A matter of careful timing!

So simple. It happens. The 20 million shares show up, daily, at the ask, but you never see the 180 million share overhang, just out of sight, behind the ask. MMs can do this. MMs DO DO THIS.

SO THE SIMPLE ANSWER TO YOUR QUESTION IS THIS: They are not suppressing the price, they are selling a large large block of shares, slowly, keeping the price where it is, so their specialcustomer can achieve his goal. DON'T SELL 'EM ALL AT ONCE AND KNOCK THE PRICE DOWN!

Learn about MMs. They owe allegiance to themselves first, and big players second. Retail customers last, if at all.

MMs RULE!!!

MPEETS

[gg7]

Found a good article on market makers.

http://shockertrades.blogspot.com/2011/05/market-maker-speaks-out-ways-of-market.html

Here is a portion of the article:

MMs follow a simple code of business when making a market in a stock especially an OTC BB. That is the level that stocks will seek that yields the most volume. Now this is very important because they make money on the volume buying at the bid and selling at the ask. In other words, by making the market they are buying low and selling high. Now smart money adheres to that rule, so do all the market makers. They could careless whether the stock is at $83 or at $0.23. All they care about is the action thus being able to sell stock at the offer (The high) and buy stock at the bid (The low). To increase their profitability, they make the spread as great as possible on as many shares as they can especially if the volume falls off.

When they have mostly all "buy" orders, that's not the price that's going to yield the most volume. They need both buy and sells to get the maximum action. Remember, MMs play the volume. If the volume decreases and there are mostly Buys that become a one way volume, Buy volume. So what they do is let the stock run up to a price where it runs out of steam. They fill all the buy orders there that they can and then comes the pullback one way or another naturally or induced. During the pull back they can buy tons of shares and flip them to those averaging down or trying to catch the bounce. At some price, the stock will be relatively stable and yield the most volume. Now that is the average price you will see