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Gold/Mining/Energy : International Precious Metals (IPMCF)
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To: Furry Otter who wrote (19127)8/26/1997 1:19:00 PM
From: Roger Cordell   of 35569
 
I just conducted an interesting experiment.

You remember the other times when it seemed that the MM's had placed a ceiling on how high the price would go. I think the first time it was at 4 3/4. We recently had another at 6 1/4.

Anyway, this morning I bought 1,500 shares at the market price of 6 5/16. Then the price moved up to 6 11/32 x 6 3/8. Virtually all shares traded were going at 6 3/8 on heavy volume. It appeared that they were all buys. Something a friend told me a while back led me to believe that the MM's might be both selling AND BUYING at the ASK.

After the price moved up to 6 3/8 x 6 7/16 I decided to see if this could possibly be true. I put in a limit order to sell 100 shares at the ask of 6 7/16. Sure enough, it went right through!

What this shows me is:

1.) The MM's do decide, at times, to set a ceiling on the stock price.
2.) They are able to do this by fooling traders who wish to sell into thinking that they are getting a great deal by selling at the ask.

The fact is, if everyone was aware of how their game is played, traders who wish to sell would set their limit ABOVE the ask. This would force the MM's to raise the bid / ask to keep up with the demand.

Don't be a sucker. When the MM's have placed a ceiling, and you wish to sell, put your limit above the ask. If more traders did this, under these circumstances, the sellers would get more money, and the MM's would pay more. Sounds equitable to me.

Roger

They are still holding us down to:

6 13/32 x 6 7/16 - 290,300 shares
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