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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 660.19-0.8%4:00 PM EST
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To: Stephen M. DeMoss who wrote (28933)10/9/1999 6:21:00 PM
From: Matthew L. Jones  Read Replies (2) of 99985
 
Stephen,

The premium has already been paid on your puts. Didn't your broker put the money in your account? I have a hard time believing that the high volume stocks can be that easily manipulated. I personally don't think that MM's and specialists really care which way a stock moves so long as it continues to move. Volatility is what they want. It is my understanding (from talking to an option market maker) that if they have an order imbalance (either way) in an option, they go to the equities market to hedge the position. Equity specialists and MM's likewise go to the option markets to hedge order imbalances. Therefore, I find it hard to believe that MM's and or specialists could bring both down or up simultaneously as one is the natural hedge for the other. Does that make sense? Maybe I'm missing something.

I'm not naive enough to believe that the markets are not manipulated, however, I would think typical manipulation consists of pushing stocks through support and resistance levels to hit buy/sell stops and then reversing; gap and trap; big swings during mid day when they don't have to fight volume; false advertising on level 2 and other simpler and less risky manipulations.

Matt
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