Replies to post #39000 on Innovation Pharmaceuticals Inc (IPIX)

[Ultimate01]

Don't get me started. They always look out for their cronies (family and friends). Their label is pure old fashioned BS. Money makers is what they do out of thin air and at their discretion. The market does NOT need MMs to keep things flowing with today's technology.

[petemantx]

MM's are market makers; money makers may be their goal but market makers is their name. Their main function is to make a market for thinly traded stocks which don't have a lot of liquidity. Many penny stock investors find their function unnecessary with today's technology and, whether true or false, most investors get P.O'd at their methods as it seems to set them up for large gains at the expense at the small investor with their ability to short stocks and manipulate asks/bids to meet their needs for the stock to rise/dip or whatever. There is also supposedly a series of trades of odd lot numbers that allows them to communicate amongst themselves what they want the stock to do so they work in concert.
Getting out of MM land and onto a major exchange is imperative as then the market usually sets a very narrow bid/ask spread whereas in MM land it can get ridiculously large. The liquidity is why orders on large exchanges get executed almost instantaneously while in MM land it may take days to make a trade. It also is why all trades in MM land should be limit orders and not at market while on the larger exchanges you run little risk when placing market orders.
Example: You set a ridiculously low stop loss sell trade to protect yourself from the stock crashing, thinking there is no chance for the stock to retreat to that level unless it is about to go under, and the MM's could lower the bid to take out your stop loss order for a brief second and take the bid right up to where it was at before your trade in a matter of a second or two. You are screwed and they make a fortune as they can now immediately sell your extremely low priced stop loss for a large profit at the normal trading range that was in place just a second before they took out your order.

I am no expert in the market or MM's, this is just how I have interpreted them thru observation over the years.

[Gratefullife]

Market markers on the OTC market literally "make the market" by executing trades. OTC means "over the counter"..not fully transparent on L2 or L3. Market makers are permitted to buy, hold, short as they like...they make money on volatility and by holding enough shares to manipulate prices to their advantage.
Same issues exist on "big boards" but to a lesser degree with greater liquidity. Hence the desirability of uplisting. Read up on NITE, CANT, VFIN etc...

Stock trading is rapidly being superseded by derivative trading which now constitutes 60-70% of the market activity in securities..And most stock and options trading is HFT, computer algorithm driven trading designed to foil humans and manipulate prices with massive bidding and bid canceling in millionths of seconds, no kidding. To make money we remaining non-bots have to be smart, lucky, and master emotion.