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Microcap & Penny Stocks : Zulu-tek, Inc. (ZULU) -- Ignore unavailable to you. Want to Upgrade?

To: kentoo who wrote (7541)	5/26/1998 10:47:00 PM
From: PartyTime	Read Replies (2) \| Respond to of 18444

What you say, Kentoo, interests me. I noted the other day, on the downward trend, that there were early sells in the 200-300 range. Today, in the upward trend, there were--if I remember correctly--300-400 buys. I even referred to them, jokingly, as a junior high school trading club, the deals were so small for a penny stock. Does the MM kick in small buys and sells like this, anticipating the tendency for up and down, and once the up or down has been established, they then let it take its course for a bit. If they know the trend is a weak one (up or down), they'll eventually bring it back close to where it started and thereby, for themselves, earn a good or a great spread, and not just a miniscule one? Hope the question wasn't too complicated? Never before in my life did I imagine up or down, that didn't involve sex, could be so complicated. Fortunately, if my stocks fail I still have sex. Good luck trying to answer this one! Thanks.

To: kentoo who wrote (7541)	5/26/1998 10:48:00 PM
From: Jon Tara	Read Replies (1) \| Respond to of 18444

Actually, I think that, given the opportunity, any MM will do exactly as you have suggested. Wouldn't you? If you see sell orders coming in, are you going to want to maintain a high bid price? And if you're in no hurry to dump inventory (or don't have any), why not leave the offer where it is? And, in any case, why not keep the spread as wide as possible at all times? What keeps this in reasonable check, though, is the fact that it IS a market. Not a market of you and I, but a market of market-makers. And, unless they illegally collude, somebody will eventually jump in and better the bid or the offer, and tighten the spread. Of course, if there are only a small number of MMs (or, horrors - one MM) in your stock, you are screwed. Frankly, I'd avoid any stock with a small number of MMs unless there was a very good case for long-term fundamentals.