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Technology Stocks : TouchStone S/W (TSSW)
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To: David Alan Cook who wrote (3384)2/5/2004 7:03:18 PM
From: rogerover  Read Replies (1) of 3627
 
<As you look at the MM Board, you will notice that the amount of stock for sale at the .50 level consists of one MM offering 5000 shares with the other MMs offering 2500 shares. If the stock price continues to move up, I expect the number of shares offered at the ask to decline from 2500 to 1000 and then to 500. This is a similar pattern that TVIN had below and above $1.00.>

Those are the default (minimum) sizes that the MMs are required to show, and do show 99% of the time: 5000 below .50, 2500 from .50 to .99, 1000 at $1 or higher, then 500 and 200. If an MM shows 2500, it does not mean that he doesn't have a customer who is offering or bidding for 20,000.

<I almost never trade between the bid and ask for small cap stocks like TSSW. This provides information to the MM that there is demand or supply for a stock which they use to adjust their bid / ask spread.>

This does not make sense. Do you think your order at the ask does not "provide information to the MM"? If you put a buy order in below the ask, and you see a MM move up on the bid, it is certainly because he is trying to find stock to sell to you at your price. If the ask creeps down, he may be trying to entice you to raise your limit. I suggest that you try to obtain a better understanding of how OTC-BB MMs work if you're going to try to make money trading these stocks.
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