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Technology Stocks : Gemstar International Group (GMSTF)
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To: MOLLYSUE who wrote (3)2/12/1997 1:05:00 AM
From: Bill Lotozo   of 226
 
MOLLYSUE, This is one of the problems with a stock trading at low volumes, especially on NASDAQ where half the trades are between market maker. Otherwise, they are always the middleman between all sales.

They don't have to sell to you at 16 just because they sell to someone else at 15 7/8. It depends on how many shares you are buying. How much they had to pay for the stock from the investor who was selling it. NASDAQ isn't an auction market like AMEX or NYSE where the broker on the floor is esentially pairing up a buyer with a seller. On NASDAQ, the market maker buys from the seller then sells to the buyer. They count on at least an 1/8 point spread so they can make their money. Also, someone else might have had an open order to buy in the system ahead of you to buy a lot more shares than you want to buy so again, the MM could well pass you up.

If Gemstar traded at volumes in the hundred of thousands your open order would have been picked up. But when trading at these low volumes with the MM as middle men, there is no guarantee.
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