Ligand (LGND) Breakout! Message Board

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Biotech / Medical : Ligand (LGND) Breakout!

LGND 183.71

-1.2%

12:32 PM EST

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To: MulhollandDrive who wrote (6299)	9/16/1997 2:39:00 AM
From: Marshall	of 32384

You're right, a smaller float &/or less liquid stock generally means less people participating in the buying and less participating in the selling. Less competition on the boards allows the MMs to widen the spread. Let's look at a very liquid stock such as MSFT - there are always going to be hundreds out there willing to sell just slightly above the bid because they're all in competition with each other and the best offer generally makes his sale first. On the other hand in a tighter stock with only a few willing to sell at any one time they know they can hold their asking price higher since anyone wanting to buy isn't facing hundreds of people in competition to sell. Works the same way playing the bid (buy) side too.

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