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Non-Tech : Market Makers - What They Do and How They Do It
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To: jjs_ynot who wrote ()1/18/1999 7:38:00 PM
From: strtrset  Read Replies (2) of 429
 
Market makers at work. Check past month of trading in GCHC. The sales have been over 400K yet bid price remains constant or goes up a cent or two. Normally the stock price drops rapidly, even on small sells of 500 or less. GCHC is about to report a private placement-for the deal to go through the MMs were asked to keep price fixed at this level. They are accumulating because they were made a deal with big rewards. This scenario can be accomplished by MMs because of two facts-no insiders are selling (they control 70% of shares) and the company will not hype stock(therefore no liquidity or volume). Watch what happens to the stock price come release of financing news. MMs then will increase spread, hope for an early Monday release on news, short stock if no further news is to be released and only trade stock from market not their own.
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