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Microcap & Penny Stocks : ICVI (now MTEI)
MTEI 0.00400+66.7%Nov 18 9:31 AM EST
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To: HRH who wrote (5204)5/31/1998 12:27:00 PM
From: jeff  Read Replies (1) of 11850
 
Market Makers - more info

Enclosed below is an article posted on Usenet, where I re-posted the Forbes magazine article on NASDAQ and Market Makers (http://www.forbes.com/archive/nasdaq.htm).

Trying to keep the hype to a minimum.

Jeff

P.S. Is there a separate Market Makers thread anywhere on SI?

----------------------------------------------------------

From: sully@ptdprolog.net
Newsgroups: misc.invest.stocks
Date: Sat, 30 May 1998 21:15:25 -0400

Ancient History. Article was written in 1993. Since then:

1. Market makers have paid 1 BILLION dollars to settle a suit about those practices.

2. The NASD has completely re-written rules for market makers in National Market and small cap market Stocks. Customer orders must now be displayed. (Bulletin Board traders can stay on their knees)

3. The SEC has forced the NASD to split into two separate
organizations, one to run the markets and a separate group to enforce
regulations.

4. The Electronic Crossing Networks now allow savvy individual traders to bypass and even partially usurp market makers.

Since the advent of new NASDAQ rules, profits at some market making
specialty firms are down by 50-75%.

I'm not saying you don't have to be careful. A market maker still has a chance to do you dirty. But, unless you're trading with a super deep discount broker, it is not nearly as bad today as it was five years ago.
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