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Technology Stocks : Aware, Inc. - The Other Thread
AWRE 2.220-3.1%Nov 4 3:59 PM EST

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To: Steven Sage who wrote (26)11/22/1996 1:12:00 AM
From: John Grandy   of 71
 
In only the most thinly traded of stocks with only a couple market makers can the stock be manipulated 10%+. Market makers can 'tilt' most stocks up or down a few spread widths but beyond that it really becomes impossible for a number of reasons:

1. broad collusion does not exist amongst mm firms. someone might owe you a favor or have a common interest but when a stock is moved 10% + other larger opportunities arise which tend to destroy any collusion.

2. moves of this size can cause unpredictable and/or undesired side-effects and with the $$$$ mms make in their core business of acting as the middleman they dont want or need this sort of risk. even getting hit on the offer for an institutional-sized $1kk is enough for them to move the b/a down a notch or two to get quickly even. they hardly want to take on trading risk on a slow boring day. on a big volume day they do everything they can to offload that risk.

3. soes traders are numerous and well financed. mm manipulation becomes obvious too them and they quickly 'pile on' absorbing the momentum as the 'manipulated' rush in.

4. sec much more powerful these days.

anyway, AWRE closed at 8.5 the day before; no mm wants to take home risk just to close a stock below a certain price level.
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