IATV - ACTV Interactive Television Message Board

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Microcap & Penny Stocks : IATV - ACTV Interactive Television

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To: ed doell who wrote (2875)	9/18/1998 2:30:00 PM
From: ahhaha	Read Replies (2) of 4748

What's really going on is there is a thing called the open market. There are buyers and sellers. 99% of the action is public. By rule the market makers have to buy or sell to the public when there is no public activity immediately available on the other side. By rule market makers are prevented from initiating principal transactions ahead of public orders. Their function is to act as agent in order to make a continuous orderly market. They do have discretion over the size of inventory, but the discretion only means that they can change the bid or ask according to their judgement about the level of inventories of both sides that they hold. These actions are purely mechanical. It is extremely rare for any market maker to circumvent or manipulate the price which is established by the public activity for the simple reason that it isn't in their interest to do so. It is in their interest to get on the other side of the public action. That maximizes their profit, not belated attempts to squeeze two cents out using privy knowledge. The explanations you and others have engineered fly in the face of reality. You have to realize that in any stock there are several maybe many market makers. They sit in front of a terminal that shows the bid and ask of the other, competitive, market makers, and the transaction stream. They also have a readout showing their haircut, SMA, and instantaneous inventories. The B/A of the market makers represents the inside market. When they receive an order they initiate a trade based on the prevailing outside market, the stated B/A you see on your real time computer screen. You imply there is some sort of conspiracy by which the handling broker adjusts the outside B/A in order to accommodate a favorable inventory profit situation. That assumes the broker is operating in a vacuum and doesn't care about the rules of the NASD. Neither is correct. To assume that a broker or market maker would try some manipulation is to assume that they know where markets are going and don't mind losing their jobs or going to prison for the two cents they can gain by breaking the rules. That makes no sense. When the market maker acts according to the rules, they last, if not, they go broke fast, even if they avoid prison. What you observe is public transactions. What you blame on market makers you should be blaming on the weak greedy public rushing in and out irrationally. There is no scenario that you can give that will support the claims you've previously made. You can present any one you wish and I will explain how the machine works. I've done this many times throughout various threads on SI. The real reason for these baseless claims against market makers is that amateurs can't take the pressure of trading. They shouldn't be doing it. The pressure creates stress and they have to gnash their teeth and blame someone for their miserable losses. The only available whipping boy is the market makers.

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