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Microcap & Penny Stocks : DGIV -- Good Prospects?
DGIV 0.00Dec 5 4:00 PM EST
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To: chip who wrote (7214)4/24/1998 6:35:00 PM
From: macker  Read Replies (1) of 7703
 
what can happen is several things 1. they sell to each other at the same price with no commisions since they are MM's, this increases volume and makes it look like big volume and something is happening or about to happen. 2. they sell to each other at the bid to make it look like someone is dumping the stock, this reduces the bid and ask(many times you have heard byron or sandstuff mention that they the drop the bid and ask on a sell, which in reality could of been a mm buy)then the other mm buys the stock back on the way back up at what looks to be the new high ask which was really what he sold it for on the way down. no losses no gains. but what they have effectively done is given the appearance that the stock was tanking and then recovering and scooping up all those shares on the way down then selling them higher on the way back up. pretty slick heh. perfectly legal, great strategy. the only way it gets messed up for the mm is when we shareholders dont sell on the way down, thus the bid doesnt keep dropping and the ask remains the same until they test the waters to see who is willing to bite. that is why byron calls this a headfake and urges not to sell. when the bid ask difference is really small they know they are in trouble and need to get things going, when the bid starts dropping and the ask remains the same they are testing you. when a stock drops the bid always drops first then the ask if necessary. hope i havent confused you.

macker
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