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Non-Tech : Market Makers - What They Do and How They Do It -- Ignore unavailable to you. Want to Upgrade?

To: DanZ who wrote (67)	1/20/1999 8:34:00 PM
From: Rick Faurot	Read Replies (3) \| Respond to of 429

Sorry for the lack of clarity. On my Level 2, 100 represents a 10000 share bid or offer. I am not saying INCA is manipulating stocks. INCA is an ECN so it only shows what's put into it; however, there is no doubt that MMs will put up an offer or bid through INCA to hide who put it up, and there is also no doubt that a 10k offer or bid that appears out of nowhere is often a ruse or, as it is sometimes called, a "headfake." This can be verified when you see the same 10k offer or bid suddenly disappear after the stock direction has turned. Sure, a big buyer might "call his bluff" as you say, but that is highly unlikely, especially considering that other MMs are in on the game and wouldn't spoil another MM's ruse. Bad form. MMs are supposed to be in competition with each other, yes. I n practice, that isn't what happens most of the time. They help each other out all the time. "In cahoots" as you put it. Of course, as you say, an MM can be working an order and often is, but that doesn't mean he won't use every trick in the book to force a stock down in order to acquire it cheaper. I don't know all the MM tricks. That's why I'm posting here to learn more. But if you think MMs are just "honest Joes" I think you are missing a lot. JMHO. RickF