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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today
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To: Pr-Ac Man who wrote (10016)10/31/1998 8:25:00 AM
From: Colin Cody  Read Replies (1) of 19331
 
The MMs generally always make money, and hopefully investors can make money too. In years past MMs were more at odds with investors with their large spreads and more obvious market price manipulation.

In the past year or so the NASD and SEC have clamped down and forced MMs to narrow the spreads. The use of ECNs and alternative trading practices have also evened the score of late.

A MM is not guaranteed to make a profit. For example, I'd bet that as DCTC rose from $0.75 to $1 that some MMs had to sell short to satisfy that demand. I wouldn't be surprised if they were not able to completely cover at lower prices. Dem's Da Breaks.

MMs are big boys and they manage their risks. If a particular stock becomes too risky they widen their spreads or they drop out of the box altogether.

Today the MM is regulated more so, and in effect that makes him more of a "friend" than he was just a few years ago.

Example: This week I was a buyer of DCTC, and twice I was granted and unsolicited "price improvement" by the MM. A Price improvement, for the uninitiated is the MM selling me shares at a price lower than I stated that I was willing to pay. or conversely buying from an investor at a price higher than he stated he was willing to accept.

I would have NEVER received such a break a couple years back.

Colin
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