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Non-Tech : Meet Gene, a NASDAQ Market Maker -- Ignore unavailable to you. Want to Upgrade?

To: Dan Duchardt who wrote (931)	9/1/2000 2:10:07 AM
From: Apakhabar	Read Replies (1) \| Respond to of 1426

Dan, Consider the idea that MMs have taken a "traders first" attitude as a direct response to the competition they now have from daytraders, especially those with direct-access. You say (and I think it's the theme that runs through your posts on this subject) that MMs "create volatility in order to fool investors into panicked reactions." But it's traders, not investors, who make 99.9% of the panicked reactions (and most of these traders are market professionals). And a panicked reaction is a psychological and/or emotional event; surely you don't suggest that the rules of the marketplace be made less free to some participants (the MMs) in order to protect other traders from their own unprofitable emotions? What I find objectionable about your argument is that it promotes less volatility. How, as a trader, can you want that?

To: Dan Duchardt who wrote (931)	9/1/2000 9:06:36 PM
From: Phil(bullrider)	Respond to of 1426

Dan, Your post was very eloquently stated and mirrored my thoughts precisely in relation to the original intent of Market Makers(MM's). I only wish I were intelligent enough to assemble an equivalent post. It appears to me that the ability of the MM's to execute "naked shorts" on upswings, and use any negative news to cover on downswings, negate the original purpose, which was to insure an "orderly market". I now believe that since MM's are maintaining trading desks, they are not helping to maintain an orderly market, but increasing the volatility. I further believe that they use any negative news to cause downswings, because they can use the downswings to cover the "naked shorts" "Cause downswings?", one might ask? With the tools that MM's have, they can see the sell orders and the stop losses vs: buy orders that have been placed. What would compel them to start buying until all of the stop loss orders had been taken out? And all of the naked short shares had been covered? Are they doing this? Only they can answer that question. Although some MM firms say their research (sell side) desks are separate from their trading desks, I say BULL CRAP. If you have a company with two arms, and one arm does not know what the other arm is doing, it's like a one armed paperhanger. It ain't going to get the job done. Now, for my point: I believe that since MM's can maintain trading desks in the stocks they make markets in, they not only increase volatility, they cause a lot of it. Anyone wish to argue? Have fun, Phil