<<The MMs are the ones who have an entitlement that carries with it a responsibility to maintain an orderly market. They pretty much ignore that these days and do whatever they can to separate you from your money. When a stock falls 10% or more in 10 minutes or less on light volume, that's not the daytraders driving the market. It's the MMs trying to sucker you into dumping your stock cheap so they can sell it again when they bring the market back up.>>
I have one stock that I have traded daily since April. It has the most incredible market maker activity I have ever seen.
It has a small float and can be thinly traded at times (less than 100k per day) although generally it does more than that.
Here's what happens. There is almost never any appreciable bid size at any tier. There will often be only one or two bids for 100 shares each from say, 35 - 36 and one or two offers at the same price. Now, when a sell order comes into the market of say 10,000 shares or more, all the bids disappear suddenly and you are left with a best bid of 10-15% below the prior trade and that bid is only 100 shares. Then, suddenly, you'll see a cascade of trades at that bid and below. I often get in there and try to bid but they trade around me frequently and ignore me. This happens especially when the stock in question approaches a pivot point, such as a key moving average or a fibonnaci retracement number. I have bid at those numbers and they trade under me.
Once the seller is done, suddenly all the offers disappear and a big bid, say 5000 shares or more, will then appear anywhere from half a point to a full point above the last sale to screw over anyone who was trying to buy at those lower levels and suddenly, there is no stock for sale. In the meantime, people who are investors in the stock are freaking out, wondering what is going wrong.
This is orderly market making? I don't like getting into a pattern of blaming market maker manipulation for my own lousy trading decisions but in this one particular stock at least, they are taking people to the cleaners to benefit themselves and I wish there was something I could do about it. I print the time and sales and screens to keep a record but I doubt anyone would do anything. |
