Robert:
You are SO close I had to seriously think about even bothering to post.
NASDAQ has preset limits on the number of shares a MM is required to honor. I do not recall offhand the numbers, but I can either look them up or others here know them by heart. Basically, depending on avg. volume, Market capitalization, a stock quote must be honored at either 500 or 1,000 shares.
I have been told by a MM, (whose name was part of the company name)
that honoring only 500 shares was unofficially viewed as "horse dung."
(I paraphrase). Common practice was 1,000 shares on stocks, regardless of the rule. Of course, as you accurately point out,
a very thin stock with very little activity may easily revert to the lower limits. Unfortunately, I cannot blame the MM for this. If you do not want to own it, what makes you think the MM does? In a thin market, it goes right to the shelf... there is no contra side.
It never ceases to amaze me how people are attracted to these low
priced "stocks"?? . The ONLY advantage I can find is that, unlike the lottery, the losses on playing low priced stocks is deductible.
Regards,
Doug |
