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Strategies & Market Trends : Dave Gore's Trades That Make Sense -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (11546)	8/23/2002 12:37:39 PM
From: The Vet	Read Replies (2) \| Respond to of 16631

GMXX - OTCBB stock rules. Market makers minimum bid and ask for stocks over $1 is 500. If they are in the market then they must be prepared to trade 500 shares minimum. Of course they buy at the Bid and sell at the Ask so keeping the spread wide makes them money. With GMXX they have been selling short at high prices, and then after the buyers back off they ramp the price back down and cover at much lower prices. The problem for the MMs is that the buyers have not been panicked and refuse to cut their positions. The short position must be well over 100% now so something is going to have to happen. Good volume today, which means in 3 trading days when the settlement has to be done, a number of clearing houses won't be able to find shares.