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Non-Tech : MB TRADING
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To: CanynGirl who wrote (496)7/12/1998 6:59:00 PM
From: Sword  Read Replies (1) of 7382
 
But the story hasn't ended yet. The MMs know that the stop orders have now been executed. Most of them sold short from their own accounts at the beginning of he run (the downtick rule doesn't apply to them). The stock is now trading at 19 3/8. You got out at 19 7/8. You're so glad that you did! Wow, you saved 1/2 by getting out when you could.

Well, now the MMs need to cover their shorts, so they begin to buy back in. They execute at 19 3/8 to 19 5/8. Many late sellers are still coming in. They absorb this stock. They are now covered. The stock comes back to 20 1/2. And guess who doesn't own it anymore? Me and you!

This scenario is played out hundreds of times a day in the universe of NASDAQ stocks.

-Sword
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