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To: WEBNATURAL who wrote (52)5/18/1999 11:02:00 PM
From: WEBNATURAL  Read Replies (2) of 125
 
Notes of interest...
To: +tylcar (301 )
From: +Mark McNew
Tuesday, May 18 1999 6:51PM ET
Reply # of 306

Here is some info on the Time and Sales Reports that everyone should know.

I have been downloading some of these to try to study the MM price movements and I
noticed that on every stock that I downloaded the MM's had apparently oversold the
shares. I wrote a small program to download all of the records from 10-1-98 and had it
get several stocks to analyze. In some cases there appeared to be excess sales from 1.5
to 6 times the total float. I have not found a stock yet that was not that way.I contacted
the OTCBB to get some clarification about these reports and received a prompt reply.

When you read the report the transaction can be between several different entities.
Normally you reverse the B and S transactions since they are from the MM's point of
view. Actually they are posted from the sellers point of view. The 'B' records are
generally correct, they are all shares that the MM has purchased from one of us. The 'S'
records however are where the problem is. If one MM sells to the other only the seller
records the trade as an 'S' record.

For example say I buy 1000 shares of CAOL. That is shown as a 1000 S record. If I
then sell it back later it is a 1000 B record.

If two MM's trade 1000 shares it is recorded as a 1000 S record, and if those same
two MM's trade the same shares back it is recorded as another 1000 S record.

In the two examples above, there was a total volume of 4000 shares traded, but 1000
would show as B and 3000 would show as S, making it appear that the MM's were
short 2000 shares when they aren't.

Here is the way the OTCBB explained the possible transactions...
---------
Transaction Parties: Reporting Party
Two Market Makers: Sell side only
A Market Maker and non-Market Maker: Market Maker only
Two non-Market Makers: Sell side only
A National Association of Securities Dealers (NASD®) member firm and a
customer : The member
A NASD member firm and a national securities exchange : Only the
exchange
---------

This does not mean that the MM's do not sell short or play games, the games are
obvious even to me, but it does mean that we can't determine exactly where they stand
with the available information.

I am waiting for a response to a few more questions that I asked. Maybe there is a way
to track things a little closer.

Mark
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