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Strategies & Market Trends : Trader J's Inner Circle -- Ignore unavailable to you. Want to Upgrade?

To: Canuck Dave who wrote (2297)	12/17/1998 8:13:00 PM
From: Trader J	Read Replies (2) \| Respond to of 56535

Canuck - Yes, never, ever, use a market order on a thinly traded stock. I remember all to well seeing a 3000 share market order I had placed at 10.75 sold at increments all the way down to 10 1/8, only to be at 10.75 30 seconds later. It happens all the time. The problem sometimes with limit bids for sells is the same thing can happen. Many times I may try to sell in-between the bid/ask. For example if the bid is 10 3/8 and the ask 10 1/2, I may ask at 10 7/16. You can almost guarantee that the new ask will be 7/16 and the bid may drop as well. Sometimes it is just best to sell at the bid and not try for the extra 1/8 or 1/16. On SHRP the other day, the bid was sitting at 10 1/4 and the ask at 10 3/8. I sat asking for 3000 @ 1/4. The MMs immediately move the bid/ask to 5/16 and 1/2. Then 3/8 to a 1/2. I didn't fall into their trap of trying to sucker me up and held firm at 1/4. They eventually came back picked me up at 1/4 while suckering out some at 1/2, 3/8/ 5/16. Then they ran it to 3/4. My mistake was not getting out before close, waiting for the gap that never happened. It is fun to learn the MM games and actually be able to play with them. TJ