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

To: Richard L. Williams who wrote (198)3/15/1999 12:16:00 AM
From: eims2000  Read Replies (1) | Respond to of 429
 
I just started following this thread, I didn't know about it till now and I think its great. When stock is sold short it actually does exist in the MMs inventory. If it didn't then it would loose its value very quickly. In other words, if MMs just kept shorting the price would go to 0. Whether or not that inventory is counted in the float I do not know. I would think so.



To: Richard L. Williams who wrote (198)3/15/1999 6:38:00 AM
From: jjs_ynot  Respond to of 429
 
From a float perspective, the MM short is considered the same as any other short sale. Thus they are borrowed shares that needs to be repaid at some time. The big difference with a MM is that they don't have the restrictions on upticks for short sales. They can institute a short sale at any time, in theory to keep an "orderly market".


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