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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Bruce L who wrote (14339)	7/7/1999 7:29:00 PM
From: candleLight	Respond to of 42804

Price movement seems to indicate that weak hands exchange to strong hands. It can't be true that idiom "bear make money, bull make money, only pig don't make money" applies to MRVC at current price level. Market will tell...

To: Bruce L who wrote (14339)	7/7/1999 10:16:00 PM
From: WebDrone	Read Replies (1) \| Respond to of 42804

Bruce- options expiration a strong second order effect, IMO. We had been chatting about it on the IBM thread a while back. Ben A. has a great site where he maps the max pain options analysis for a group of stocks. The max pain theory says the maximum amount of money will expire worthless as is possible. This seems reasonable, and is not due to conspiracy, but market forces- IMHO. Well, most of the time, anyway. ez-pnf.com I think that companies that have low liquidity in options are more suceptable to unexpected behaviors near options expiration. Witness last expiration! All things being equal, I'll bet a stock's price moves to a strike price on the 3rd Friday of the month. By Tuesday, the effect has been wiped clear. I'm with you, this is no myth. It's a trader thing, though. If I'm holding, I just shrug it off. Web

To: Bruce L who wrote (14339)	7/7/1999 11:19:00 PM
From: ahhaha	Read Replies (4) \| Respond to of 42804

Did you really read my answer? Yes, but it is worthless because you don't know the mechanism of market making. This seems to be endemic on SI. Endless discussions about something which the discussers do not want to understand. Does it really say anything more than, "It is too dangerous for MMs to do anything more than let market forces of supply and demand play themselves out"? Yes, but you miss the point, you didn't really read my post. It isn't too dangerous, rather it is poor business practice and ends up with the practicer going broke. Anyone including MMs are trying to influence the market for any stocks. The MM operates under stringent rules preventing them from shooting themselves in the foot. When you understand this you will no longer feel compelled to perpetuate myths. What non-conclusionary facts does your post contain that supports this position? The definition of the function of a market maker which I gave but also which you haven't assimilated by the non-conclusionary response you've provided. l. Yes 2. Yes. The option exchange market makers do the writing. The common stock MMs rarely do. If you're an MM and you do, you're opening yourself to review and censure. Why do that for two cents? Even on the NYSE where it was quite popular during the late '80s. it has become a silent scourge. I can't tell you how many guys have gone down because they used that poison. In wild markets sometimes in desperation it's any piece of paper you can get, but most of the time it's hands off the poison. The thing is that in circumstances like that, you can't get the get the option floor by pulse radio. No one's there. They're all hiding in the bathroom. 3. Are you saying that traders for MMs in "smaller cap NAZ" stocks NEVER have the authority (as Greg says) to do anything more than attempt to capture the spread? What is this capture the spread nonsense? You make a market, you don't engage in arbitrage. To make a market means you buy or sell when there isn't public offsetting action. That's all it means. If you do that and only that, the market forces you into a continuing state of positive expected return. It is the hardest thing in the world to allow yourself to be completely at the whim of the market, but the saving grace about it is that you are forced to do what you don't want to do and that is you have to buy when the public is selling strongly and you have to sell when the public is buying strongly. You are forced to go against your knowledge and wisdom and do what you know isn your gut is wrong, but lo and behold, you end up making a ton 'o dough by implementing this obedience! It is the nature of valid contrary opinion. It's so contrary that only the market can force you into doing something that dumb. Believe me, it is one of the hardest things to learn. That they do not have the authority to appreciably go long or short a stock for the profit of the inventory account? Anyone can do pretty much whatever they want in any account as long as they don't interfere with the public action. Does that mean that doing so is wise? Or is it pretense to knowledge? When you know the book as the NYSE specialist does, that can get you in more trouble than you can imagine. You have to learn to leave it alone if your purpose is to survive and prosper. You have to learn to do what seems wrong. You have to get on the other side of the public action when the other side is illiquid. If you can't learn that, you won't last 1 month and it will be your capital which goes down the drain. MRVC is at 15 3/8; trading has been light and desultory; a trader for one of the MMS - who has sold call options on the stock, decides that he can DRIVE DOWN the stock to closer to 15 through the mechanism of posting short sales at or below the ask totaling maybe 1500 shares. I assume you mean "sells short" when you use this obfuscation: "posting short sales", because posting short sales is a sham and it is illegal. It's a fast way to lose your license and all the data to prove you guilty is in the trace. Also, you can decide anything you want but that doesn't mean you can make it happen. If a stock is worth 15, heavy selling to hold it down or drive it down may cause it to rise. I use the technique all the time. If a stock absorbs selling without downtick concession, there's strong hands nearby. The stock is perfectly elastic with respect to marginal supply. I'm buying now. The stock jumps up on my purchase and I know it is inelastic with respect to marginal demand. Others see it. You clowns still want to be short 30 July 15s? Hope so. You'll be running to discover the inelastic state too. To make your story short you are saying that it is demonstrable that the MM is overtly showing intent to defraud by creating false trades or trading against the public. I stated previously and in this post that that is illegal. Are you saying that this never happens? No. It happens, but rarely, and guys have done hard time for doing it. They enforce these laws almost like no other and it is practically impossible to avoid detection. Even E&OE is reported by your fellow MMs. They have to self-police to keep the action clean. They don't want oversight from the SEC which causes everyone including the public problems. What you are glibly implying is that these illegal practices are common and are somehow conveyed through the options exchanges. It is true that "your belief is a myth that 'has no basis in reality'", and that isn't a myth.