Rick:
I would propose that the "axe" in a stock is not necessarily the market maker who trades the most volume in the stock. As previously pointed out, NITE and MASH create heavy volume by payment for order flow. This likely is not, however, "smart money" or "deep pockets".
On the contrary, payment for order flow is simply executing trades for the lowest members of the investment food chain: Retail investors. NITE and MASH pay for order flow to enable them to buy at the bid, which they offset by selling at the ask, resulting in a relatively small overall impact on the direction of the stock.
Market makers with large trading operations, such as GSCO, MLCO, etc. use proprietary trading systems to trade large sums of money. They have the "deep pockets" to MOVE markets, or halt them in their tracks. I would consider them the "axes" to monitor, not the volume leaders which may not heavily influence the direction of a stock.
Good Luck,
-Eric |
