Momentum Daytrading - Tricks of the Trade Message Board

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Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade

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To: Ken Wolff who wrote (592)	2/23/1998 12:51:00 AM
From: Paul Kim	Read Replies (1) of 2120

Great site and I've been following for some time and learning a lot. I have a question regarding MM actions and I hope you can help me. When good news comes out on a stock (thinly traded Nasdaq stocks especially) and the stock starts to take off with all orders on the buy side, does this mean that in order to meet the demand the MM's are stuck on the short side of this transaction, or are they selling basically out of their inventory (or a combination of both)? If they are shorting heavily into a rising stock, doesn't this mean that usually when the buying starts slow down after a rapid rise, the MM's have an incentive to bring down the price artificially even without heavy selling? Could you further explain the exact role of an MM and how they can "manipulate" stock movements? Thanks in advance.

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