Replies to post #33745 on DD Support Board and Research Team

[janice shell]

I'll be interested to see it.

But it's isn't the MMs' job to care who wants to buy and whether anyone wants to sell. Their job is ALWAYS to trade against market sentiment. If people want to buy, they have to sell; if people want to sell, they have to buy.

[236T568]

It appears that you fail to understand the definition of what it means for the MM's to keep a fair and orderly market in a stock.

[DragonBear]

Agreed but there's many times when there are no sell orders in when the rush begins.

Mms will, without a verifiable significant corporate development, fearlessly short to the sheep

That's not what MMs do. They set the bid-ask spread and then have to maintain that spread buying and selling with the shares they have on their books.

I once read part of a book where the author laid out his system of day trading. It involved looking for indicators in the L2 stack, where the Specialist (NYSE) was bidding or asking to maintain the spread. The idea was the individual trader would steal in between the Specialist's bids and asks, and beat the Specialist at his own game of shaving pennies. Making it a little mathematical challenging was the copyright was 1973&1999, and examples were given in fractional notation (e.g. 60 5/16). The game being if a Specialist could make 001 on a volume of 10M shares of a big board stock, involving a few hundred or more trades, it adds up at the end of the day. Chances are the author's system got blown out of the water when Quant fund computers came online. LOL

So how does a MM make money off of fractional pennies on stocks selling for fractions of pennies? That's already a tight squeeze. Unlike the book case above, they can't rely on hundreds or thousands of trades per day. What's left for them to play against - volume? What consistent volume? There is none in these penny stocks. With low freq, low volume trading on penny stocks there just isn't a way for the MM to play the big board game.

The only mission of the MMs in a normal pinko is to maintain the bid-ask, prevent any fat finger mistakes by the individual, and collect a cut of the commissions from the brokerages. I have observed numerous posts on penny stock forums about evil MMs wanting to "get their hands on your shares". One always needs a scapegoat for a penny stock not meeting one's instant gratification expectations. But they never ask: Why would a MM want to do such a thing? Where's the pay off for them? There is none.