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Technology Stocks : VLSI Technology - Waiting for good news from NASDAQ !!! -- Ignore unavailable to you. Want to Upgrade?

To: Daniel who wrote (3001)	2/25/1998 11:46:00 AM
From: Joseph E. Caiazzo	Respond to of 6565

Sales and short sales and short sales against the box.

To: Daniel who wrote (3001)	2/25/1998 2:28:00 PM
From: Hashem Akbari	Read Replies (2) \| Respond to of 6565

Dan, Someone told me that it is the MMs who do most of the manipulations. Here is an example that was offered to me and probably applies to the last Friday high-volume (?) trading session (2/20). Suppose that you and I are 2 MMs that have 1M shares each. We also have sold a lot of call options at SP of 22.5 and 25. If the market closes below 25 and as close to 22.5 as possible, then all 25 Calls are worthless and those 22.5 Calls also worth a lot less. Here is the manipulations: I sell 100K shares to you at 24.5 you sell 100K shares to me at 24.5; and of course, this is on the down-tick. This brings in some additional sales from those who are scared and some additional buy from those that find it a buy opportunity. Then 5 minutes later we exchange another 100K shares at 24. It scares more people, more sales come in an less buys! Now we have traded 0.5M shares (high-volume for the first hour of trading). We keep doing this throughout the day. Buy the close of the session, more than 4M shares are traded and the stock is down to 23. The MM net profit of the day is: he still has the same number of shares as in the morning, perhaps picked up more on down-ticks, all the 25 Calls are worthless and all 22.5 Calls are only worth $0.5 (much less than the price when MM sold it). This is one way that manipulation is done in NASDQ market. The focus of manipulations are always very volatile secondary stocks. I appreciate comments. Hashem