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Biotech / Medical : IMNR - Immune Response
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To: ahhaha who wrote (892)7/9/1998 5:31:00 PM
From: AHM  Read Replies (3) of 1510
 
An excellent presentation - and the paranoia expressed by Mr. Knight in response and by countless others over the past several weeks discloses their lack of understanding of the function of desk traders and the responsibility they carry to utilize a limited budget assigned for each security in which the firm makes a market.

To add my own two cents to your comments: except under special circumstances (and in general, circumstances that require the approval of a senior officer or partner) their objective is to wind up the day with either a small position or no position at all. It has been my experience that this is why there can be unusual swings at the end of the day. They want to clear their books and minimize the market risk of holding inventory overnight or, worse yet, over a weekend or 3-day holiday weekend.

Of course there are game players - but they are typically younger desk traders who think they can get together with a few of their buddies and pull something off. Periodically the press covers such people getting caught and being arrested in their offices and carted off for arraignment.

A number of years ago while making a computer consulting call on a Wall Street firm I personally witnessed such an arrest. It's not pretty! The FBI agents (there were four of them)marched into this highly placed individual's office during trading hours, handcuffed him, and practically carried him out (in tears) in front of the entire trading floor. The FBI agents made certain that the commotion would not be missed by anybody. The firms such people work for are among the most prestigious in the nation - Morgan Guaranty, Salomon Brothers, and the like. What frightens these firms as much as anything else (adverse publicity is the least of it), is that they are ultimately held responsible and wind up forking over huge multi-million dollar fines for not having effectively supervised the individuals who were found guilty of market manipulations and/or insider trading.

Yes, manipulation is taking place. But when it does the stakes are far higher (for the risk that must be taken) than the paltry amounts that can be made by playing around with small stocks such as IMNR. I doubt that any traders who figure they can make a fast buck would mess around with a stock that trades in such light volumes (relative to other heavily traded NASDQ stocks). The regulators now have highly sophisticated computer tools that spot unusual trading activity - and in a lightly traded stock it is hard to conceal from such scrutiny trading patterns that are rigged. It's also hard in more heavily traded issues - but lighter illicit profits may not show up right away due to the volume of activity.
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