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Microcap & Penny Stocks : New Sky Communications (NSKY) -- Ignore unavailable to you. Want to Upgrade?

To: Retaylor who wrote (1388)	8/19/1998 1:22:00 PM
From: StandFast	Read Replies (1) \| Respond to of 2601

Where is the constant interaction which occurs on the thread? Or is everyone dumping?

To: Retaylor who wrote (1388)	8/19/1998 1:23:00 PM
From: Donster	Respond to of 2601

Reytaylor and all. While we're in a bit of a lull, I thought everyone might be interested in this excerpt from a PM exchange I had with a wise stockbroker recently. The discussion concerned MMs and their role in BBs. We were talking about the occasional lulls in trading and I brought up, as some had posted on NSKY, that the MMs were huddling, cooperating on strategy or just plain "out to lunch." Here is what he had to say: "Fear and greed are the building blocks of the market and speculation is their offspring. Stocks move in a stair step fashion, both up and down. Greed drives the up legs; fear the down legs. Those who believe the MMs are out to get them are ill informed at best. MMs job is to meet demand with supply either out of their current long position or they can sell short to meet near term demand or sell on behalf of a client who has a limit order in with the MM; conversely, when stocks drop in price they are there to add to their positions, cover their recent short sales or satisfy a customer purchase order. "Put yourself in the shoes of a MM. Your firm has hired you to trade stocks, to make money, not to lose money. They don't pay you to outguess the market or the buyers and sellers of a particular stock. Ideally, they want you to leave at the end of the day with a flat position book, for you never know what may happen overnight. Also, you are probably assigned 20, 30, or even 50 stocks to make a market in based upon your experience. You don't "go out for lunch" as some have suggested...you could lose a lot of money or the opportunity to make a lot of money should one or more of your stocks start to move dramatically in one direction or another. You don't conspire...the S.E.C. lawsuit has seen the end of that practice which was basically setting the spread between the bid and ask. You take what the market gives you. I couldn't tell you how many times I've called my trading desk over the years, until I found out it falls on deaf ears, about a news item that I saw on Dow Jones, or Bloomberg, or one of the Internet news services. The MMs don't have the time nor the inclination to hear these things. They react to the pressures of the marketplace. If there are a majority of limit orders in a stock, the MM realizes or supposes that a client(s) of the firm are building a position quietly. If they are inundated with market orders and other firms are calling to buy stock from them (or sell) then they know something's cooking and don't be brave, just go with the flow." Hope it gives everyone food for thought, as it did me. Regards. Donster