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Microcap & Penny Stocks : NETZ - gets deal with DEC! future 100 bagger? -- Ignore unavailable to you. Want to Upgrade?

To: milesofstyles who wrote (1487)	12/20/1997 4:40:00 PM
From: Michael Harb	Read Replies (1) \| Respond to of 1702

<<thanks for sharing, the question still remains why fill an small order at .18 and then fill 2 huge orders at a higher price? does that make sense to you? here's what mm thinks "gee just bought this last guys for .18, guess i'll buy these next 200,000 at .19", and then take the rest at .18 after that,did you even look at the activity that was posted? >> I don't have my Level II up at the moment. But let me present a hypothetical based on the above. Consider the Market Makers situated as follows (hypothetical top 5): bid .......... ask ALEX .17 MHMY .18 PGON .17 ALEX .19 MHMY .16 CCCC .19 CCCC .15 PGON .21 BTRD .15 BTRD .25 OK. Say small order comes in to buy 5000 shs. If it is a market or a limit <=.18, it should execute at .18. During or shortly after, the MM's see a couple huge orders coming in. MHMY will probably raise his ask to try to get a better price(as will several other mm's). Or MHMY may not have 200,000 to sell, so he drops off the bid. The next lowest ask is now .19. The trades execute. Maybe ALEX takes all, or maybe ALEX takes 100,000, drops off the ask, and CCCC takes the other 100,000. Now the buying pressure has dried up and the MM's settle back down again. PGON may drop to .18 or any other MM. Trades start executing again at 18. One very important thing to keep in mind. People always complain on these threads that - "Hey, a 20,000 share buy went through, and they dropped the bid". Sure. There's nothing wrong with that. MM's don't adjust their spreads to trades that have ALREADY executed. They are responding to the pressure of buys or sells coming in that HAVE NOT YET executed. The fact that there are multiple MM's "helps" ensure competition on the bid and the ask. I'm not saying that maniplation, etc. doesn't happen. It does (Not to the extent everyone on SI seems to think IMHO), but it's more or less every MM for himself. I've posted a good bit about MM's on the ARET thread if anyone feels like hunting more info down. Hope this helps. mike