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Gold/Mining/Energy : Gold and Silver Mining Stocks -- Ignore unavailable to you. Want to Upgrade?

To: TheBusDriver who wrote (2496)	10/7/2001 6:19:30 PM
From: IngotWeTrust	Respond to of 4051

YES, Wayne, that is what I am saying. >>This is a revelation to me. Are you saying marketmakers are given information about a stock to take a position in preparation for a move up or down?<< Not all market makers are privy to the company dispersed information. Some marketmakers just up and list themselves as market makers based upon either action they are seeing in a stock, a tip or a rumor from their favorite backroom clearinghouse trades clerk, or by some "electronic alert" on their equipment flashing and drawing attention to a stock. However, in order to get a listing approved by the SEC for OTC BB listing, there HAS TO BE BY REGULATION a sponsoring broker, who agrees, IN writing to sponsor that company's shares, i.e., provide liquidity on both the buy and the sell sides. All those who "list up," i.e., use their assigned abbreviations and type them into the brokerage system CAN join as marketmakers also. For example: I'm observing one silver issue that a buddy of mine is hot for...there is only ONE written, marketmaker with a fiduciary responsibility contractual to and from a montana silver company. However, when you punch in that company's symbol on the OTC BB website, as many as 6 and somedays as few as 3 are shown as making a market in that particular stock. And their bid/ask range from 2c-60 in one instance to 8-12 in another, with varying size on either bid or offer. If you'd like to hear it from the horse's mouth, here's the way another Board of Director described the process in his own words a few weeks back. "You know we have several market makers pushing the stock, and it is up to us to spoon feed them information as it occurs and to do it ratably so the pump is primed. That is why we don't want to let out news except where it will do the most good; i.e., through professionals who do it for a living." If the word, ratably is new to you as it was to me, perhaps you will find this Merriam-Webster's definition link of interest. m-w.com You ask about their ability to move a stock's price down prior to a run. The answer is yes. How can that be honest? Because that is the only way they can accumulate shares to provide their contractual obligation to provide liquid markets. The company doesn't issue them shares to "play with," they have to get them, in order to have them on hand, in order to provide the required liquidity. Conversely when the news is bad, they have to absorb the losses on the shares they hold to again provide liquidity for a company. Their ability to make money by the fistsful is indeed a very real possibility. But they can also lose money just as quickly on a bad set of drill results, or a death of a principal in the company, or a strategically announced USGovt embargo on a nation or commodity, or even a sneak terrorist attack here stateside. We don't like to think of them making money, but they must if they are to stay in the game for the rest of our benefits. And we love to hear them lose money because we hate their spreads, but that's not fair either, Wayne. So, it's like in any "competitive event"...one must determine what they want to buy, and how much and at what price. An investor needs to make our own rules. For example: I'm in a very thin stock currently...it had a nice pop recently, currently doubling my money. I wanted somemore this month. I waited until it had been a week since it traded. Then I went and put my BUY 2 c under the lowest BID of the lowest marketmaker listing on the OTC BB website. BANG, they took it. I've got my additional shares, and the mm had to adjust what bid/ask was to be posted, for all 5 of the listed mm's even tho' only ONE is required by contract to be a market maker for this firm. I sure hope I've helped educate you. It has truly been my intent to share helpful information. YES, it will change the way you view penny stocks. It sure did me. And after I got over feeling ripped off by legal insiders, I learned to utilize the system to my advantage and "buy when nobody wants 'em and sell into strength when EVERYbody wants 'em." Good Trading, Wayne gold_tutor