FAMH - FIRAMADA Staffing Services Message Board

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Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services

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To: VBH who wrote (10635)	4/5/1998 11:37:00 AM
From: Mark[ox5]	Read Replies (2) of 27968

LESSON #2: From a former MM who now plays the market: RE: When the spread is tight or loose... in this example a penny stock who just had news and the bid is .19, ask is .26 The spread signifies "usually" the activity in a stock - the more active the tighter the spread. = more competition between the MM's for the buyers & sellers. A wide spread especially with a low bid would show that the MM's are confused by sudden activity and probably short the stock because they had no inventory (or had inventory at low prices) - they try to force the sellers into selling low and try to scare the buyers away due to a low bid. You would not want to pay .26 when the bid is .19 would you? It looks like an immediate loss of .07? After the MM's shake out (scare) the buyers they then move the bid & ask up!!!! that's how they make money.

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