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Microcap & Penny Stocks : lzmcf-lasermedia
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To: Andrew G. who wrote (28)3/11/1999 2:22:00 PM
From: Eric Fader  Read Replies (1) of 274
 
Andrew- I think you're exactly right. The MMs are having trouble finding sellers, and the larger spread is how they handle this problem. The shares sold at .30, for example, are probably going to be sold short. The conservative thing for the MM to do after selling some short at .30 is to immediately go high bid to buy them back at, say, .25 or .26, but many MMs are willing to let their short positions build up a bit and hope to get a chance to cover a few cents lower on a pullback, especially on an OTC-BB stock. When they don't get a pullback after awhile, that's when they get into trouble and you can start to see some "dirty tricks." I trade through a MM who happens to fit into the "conservative" category but I'm very familiar with how the aggressive guys do it, too. -Eric
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