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To: Lee who wrote (84590)	12/10/1998 10:33:00 AM
From: BGR	Read Replies (1) \| Respond to of 176387

Lee, Wider spreads discourage trading and lead to greater volatility in prices. Thus it has an indirect effect on prices. But the price swings are random and not biased in any one direction, thus it is not manipulation in the sense that it does not influence the direction of stock price movement. Of course, the resulting volatility is often used as a justification for greater spreads (necessary to protect the market maker) in a circular logic pattern. -Apratim. PS: Unrelated to this post and not addressed to you Personally I have found posts by CTC, Geoff and Nihil extremely beneficial to the enhancement of my understanding of the dynamics of financial markets (I have been following their posts for about a year now) and would rather follow their well-reasoned arguments than accept guidance from claimed possession of hard-to-explain oracular powers.

To: Lee who wrote (84590)	12/10/1998 10:41:00 AM
From: nihil	Read Replies (1) \| Respond to of 176387

RE: Manipulation Yes, fixing spreads is illegal price fixing under the Sherman Act but "manipulation" technically, is " ... buying or selling a security to create a false appearance of active trading and thus influence other investors to buy or sell shares." (Barron's Handbook. In the NASDAQ case we are discussing, wider than market price spreads would reduce trading, while increasing market maker profit on each trade and would not properly be termed "manipulation."