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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: chester lee who wrote (14550)	10/10/1998 9:17:00 AM
From: Mama Bear	Read Replies (2) \| Respond to of 18691

chester, yes, I understand the mm's will engage in this activity in thinly traded stocks to run the price up. FAHN sells 50k to HRZG, who sells 50k to FSCO who sells 50k to FAHN all at the same price. This creates the illusion of an interested buyers, and will get a lot of daytraders all hot and bothered. The daytraders start buying, and the mm's walk the price up. They may swap some more large blocks. Which get the daytraders even more excited. But ALTIF has been trading on light volume, so this is not the case here. Oh, I am always suspicious of this when I see paired trades at the same price on an illiquid stock. I recall one day watching ENML and almost every trade was paired to an equal trade. I.E. 2k would cross at 5 1/4, then another 2k at 5 1/4. The stock ended up going to 8 in a few days, with me shorting all the way up from 6 3/16. But this is a little different than an mm offering an artificial price support. At least my definition of artificial price support is that the MM just won't lower the bid. This means that the MM has to buy as much stock as is thrown at him at that bid. For example, an MM could certainly bid 10 per share for CFON and the price would not fall under that. But I suspect that he would soon own nearly twice the company's available shares. I know I would be selling some at that price. He would then have to find buyers or suffer the ignominy of being the major shareholder in CFON. Perhaps he could put the shares in a cash account and the shorts would have to buy from him. Barb