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Non-Tech : Bid /Ask Spreads - Market Manipulation
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To: ---------- who wrote (276)3/19/1997 1:53:00 AM
From: Andy Chen   of 308
 
I think you have a very good point. However, there are several inconsistencies.

bid-ask spread is the most common misconception on how the market makers rig the market. the fact is that smaller market making firms do not and will not go against a bigger firm. simply nobody wants to lose money. and who are these small market making firms? they're probably owned by your discount stock brokers. therefore, it is logical that the movement or swing of a stock can be controlled by special interest. when a special interest is sitting on top of a large long position, chances are the stock won't go down as much as it should. likewise, when a special interest sits on top of a large short position, it is gonna take more than good news to drive this baby up.

put yourself in the position of the market maker, what would you do if you long the stock? UP UP UP... what if you are short? well, you know.
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