Afternoon Cliff,
Took this off another board:
MM's and shorted stocks:
Market makers (MMs) are dealers who are directly responsible for stock
transaction. For example, I sell xxxx, MMs buy, and when you buy xxxx,
MMs sells. MMs make the most money from the manipulation of OTC BB
stocks, not the spread which has been limited by SEC. Only purpose of
MMs is to make money, otherwise they don't want to market this type of
stock if they can't make enough money. Basically, MMs want to buy at
the
low and sell at the high.
One of MM tricks is to manipulate shareholders. For example, when they
look at XYZ chart, they see XYZ has never run up more than a certain
price per share, they believe that the stock price will be down soon,
then they short the stock by selling the stock they don't have,
because
they have three days to settle (send the stock certificates to a
transfer agent). However, they found the stock is so tight, they can't
borrow anymore. Then they send one
guy (they are hired by market makers, $2,000-4,000/month or more) to
bash the stock hoping they can hammer down the price. I believe they
show up here very often to bash the company and the stock!
Hmmmmmmm?????
If this is not working, and more people are buying, they have to cover
their positions by buying more stocks back, then the price goes
higher.
.................ps....
hope this helps....more to come
pvt jat ÿ |
