To: Larry S. who wrote (5117 ) 2/2/1998 8:44:00 PM From: LastShadow Read Replies (2) | Respond to
Larry - a market maker is not necessarily a floor trader on NASDAQ - one who makes a market in an equity can be a variety of financial institutions. If you sell an option on stocks you own, you are in essence a market maker, albeit for a short time and inconsequential amount. If you buy commodities or futures, in large enough quantity (such as the Hunt's silver hording) you are also the default market maker. However, the common usage is for floor traders on the NAS (usually in a derogatory vein). When a stock moves in a huge bid/ask spread, the volatility is governed by a variety of factors. On the NYSE, the floor traders make their money in the number of trade's volume, and not in the manipulation of the stock price. Showing an increasing ask generally drives a feeding frenzy, and also is much more short lived than daily incremental steps as in IOM. this shows professionalism in that they are not inflating the price of the ticker or generating zealous interest in a one or two day splash. The floor specialists are managing its price action well. Sorry for the confusion - I didn't mean to imply that the mm was the floor trader/specialist.
