Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (142131)	1/7/2002 10:52:47 PM
From: LLCF	Respond to of 436258

<Well 1) Your friend might not but does that mean no one does 2) Does it matter if it is the MM or someone else doing it?> There a lot of different things going on as you say. Graces friend [it looks like from the description] had to match the average trading for the day in some way. The big players are getting sophisticated and competition is very stiff to get order flow. So what here friend had to do [it looks like, and I know this happens] is guarantee ahead of time that the client would get the average price. I've seen cases where a block desk had to bid for Xmillion worth of stock, six DAX names, you know 4, of the other 2, only one is in the DAX [this was in Germany]... what's your bid? -NG- You like that?? Also, as you say folks that have 100k shares to buy without constraints take advantage of the orders... all the time. Not that I think any of this is that relevent to us... DAK

To: mishedlo who wrote (142131)	1/8/2002 12:32:21 AM
From: GraceZ	Read Replies (2) \| Respond to of 436258

2) Does it matter if it is the MM or someone else doing it? It does if you are saying that there is widespread abuse by the Nasdaq market makers. If I put up a big bid and then remove it just before it gets hit, its not illegal. I see it happen all the time on ECNs where there is no MM, just one trader to another. You can call it anything you want (sneaky, deceitful, etc.) but I can't lose my ability to trade over it or get fined or go to jail....the order could get hit though before I can cancel it. It certainly has the same effect on you as if the MM does it, other traders are fooled into thinking there is large size that isn't there. My point to you is that you don't have any way to know if the MM is acting on their own when these bids appear and disappear or if they are acting as agent. 1) Your friend might not but does that mean no one does I assumed as you did, that's why I asked her. She sat at a pretty big desk with a lot of other traders, where there are few secrets. I'm certain there is someone somewhere who has done this and maybe even continues to do this, I don't know. What I do know is that if you could make close to a million a year following the rules it would be silly to risk doing something illegal that also has the downside of subjecting you to big losses. Every move is traced. If an MM is accused of doing something illegal it is highly traceable. Frequently the firm will settle with the SEC instead of fight a disciplinary action because it works the same way your liability insurance works, if the cost to fight is more than the settlement you settle even if you are innocent. The thing about the market is that everyone does in fact distrust everyone else, almost everyone assumes someone else is in fact the one screwing them. If you are trading, basically you are taking money from someone else who is also trading. Traders will try just about anything to disguise their actions. Institutions do this to a certain extent as well. They break up their buys over several firms so that the word doesn't go out that one particular firm is accumulating a large block of whatever.

To: mishedlo who wrote (142131)	1/8/2002 9:34:10 AM
From: Tommaso	Read Replies (2) \| Respond to of 436258

The place to see the market makers really in action is the OTC-BB, where spreads can easily be as high as 25% and more of the value of the stock. Also in trading options. I think the options trading may be a little more carefully supervised, since a couple of times my broker seems to have stepped in and demanded a revised trade when the price switched abruptly against me. But I don't think there's much regulation or any recourse for the penny-stock manipulators who will sudenly drop their bid or raise their ask by 20% or more, seconds after an order is placed, when the bid/ask has been hanging there for hours or even for days--in some cases, weeks. I figure it's a den of thieves and if I go there I have to get used to the idea that I am being fleeced. The only way to win is to be right in the longer term and do your trading when and if there's enough action in the stock to narrow the spread.