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Technology Stocks : Compaq

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To: James Yu who wrote (25732)5/7/1998 12:49:00 PM
From: Y. Samuel Arai   of 97611
 
>> OT :: I saw the COMS block of 6 million on my real time. It was a
>> SELL.
>> -hitesh

>Could you tell me what the difference is? When someone SELLs,
>there must be another party BUYs, or the transaction will not
>happen at all, right? If there was an imbalance, the price should
>move a lot...

Transactions don't occur between buyers and sellers. Buyers buy from the market maker at the ask price, and sellers sell to the market maker at the bid price. The Market Maker assumes the risk of an imbalance but they will move the price to balance things out.

E.g. if there is a lot more buyers vs. sellers, the MM will move the price up to bring in more sellers and attract less buyers (balance).
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