New US Economy Policy Message Board

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Strategies & Market Trends : New US Economy Policy

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From: Arthur Tang	8/29/2007 2:25:28 AM
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Wall street market makers need a software to help them do business? They are doing them by hands on experience now. The general rules are easy to understand. The computer has to have a short interest control program to have sufficient cash reserved to buy back stock. Each time, a nice move will increase short interest; conversely pull back will decrease short interest and deplete cash reserve. If short interest can not be bought back, then price will be moving by the pennies for years. In which case, the company has to assume the role of cash and stock pool. Selling some stock to maintain short interest. The market makers had to negotiate the price to buy stock from the company that issues the stock. If the short interest is below the safe level, then the company will use the cash pool to buy some stock to be sold back in the market later. The price of the stock can then be guided by earnings and P/E ratio. Feds will be informed on the way markets work on Wall street, and bridge the cash reserve shortages if necessary. This can be done using computer program, with tight supervision by market makers in person.

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