Meet Gene, a NASDAQ Market Maker Message Board

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Non-Tech : Meet Gene, a NASDAQ Market Maker

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To: Wayners who wrote (542)	8/15/2000 10:22:58 PM
From: gene_the_mm	Read Replies (1) of 1426

WAYNE... Marc Friedfertig traded index futures on the AMEX and the NYFE, and was not a NASDAQ MM. I am sorry you feel so strongly about MM's activities and when you are referring to the Christie-Shultz study I cannot say that I completely blame you. However, since you claim you do not really follow the OTC BB please give some examples here (specific examples) of how you think MMM is going on in the thinner traded stocks of the NMS or small cap arena. What you referred to as 'walking' the stock might be a common trading strategy that larger MM's use when taking risk (positioning a large block in inventory). He tries to find a level where he is comfortable buying or selling a large block of stock. In turn, he takes the risk of having that position go against him. This may be what you are referring to, and the movement of these stocks is based on the laws of supply and demand - not a form of manipulation. If during the buying or selling the MM with the large order runs into an MM or ECN on the OPPOSITE side of his block, he has found a 'saturation point' as Friedfertig puts it. Now the MM must decide how much risk to take as well as make sure the order is handled properly (Obviously there can be many, many different scenarios for stock movement -- I have given only one quite plausible example here). Despite the masses that believe MM's have a license to 'print money', there are tremendous risks involved. If you don't know how to trade and can't handle your 'risk management' you won't be trading as an MM for very long. I have seen far too many traders 'blow up' by overextending their risk levels. Thanks for the great input Wayne. I look forward to your future posts. All the best, -- Gene

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