Joe, This question has been asked many times on different threads. The answer is No.
On Nasdaq, buyers and sellers deal with market makers. On the big board, they deal with specialists. At an moment, a market maker or specialist might long or short a stock, just to fill a buyer or seller's order.
Consider the following senario: A thinly traded stock on the Nasdaq has only one trade on a particular day, a buy of 1000 shares. If the order is under the ask price posted by the market maker, the market maker is obligated to fill the order. To do that, he will have to "short" the stock. So by the end of the day, he will end up short 1000 shares of the stock. Let's say the second day, there is only one sell of 2000 shares of the same stock. The market maker will buy the 2000 shares. Covering the 1000 short shares from the previous day, he ends the day with 1000 long shares.
Of course, in most cases, market makers and specialists don't want to be long or short of a stock by the end of the day. Therefore, if there is a big block of buy, they will usually raise the bid prices to attract buyers. On the other hand, if there is a big block of sell, they will lower ask prices to attract buyers.
-- James |
