Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : After Hours Trading(ECN)-The Coming 24/7 Trading Explosion -- Ignore unavailable to you. Want to Upgrade?

To: Richard L. Williams who wrote (41)	4/9/1999 6:22:00 PM
From: Lola	Respond to of 314

I think the OTC stocks should continue to have dealers (or market makers as you Americans refer to them) if the dealers can be honest and work more like a computer would. To answer your question "how would a computer work in this situation?", the computer would create a true orderly market by raising the price if the demand for the stock increases and lowering the price if there are more sellers. If the float turns several times in one day, the stock would continue to go higher and higher. The computer would NOT short the stock to cover the demand. That would create a false market and make it harder for the regular guy to make money based on being first to realize the potential of the stock. A false market is not an orderly market. In most cases when MMs are shorting the stock to cover the demand, they are creating a false market which ends in a disorderly market. This explains why we need a computerized system to replace the MM system. MM system doesn't work very well at all. I will not miss them. Lola

To: Richard L. Williams who wrote (41)	4/10/1999 7:06:00 AM
From: brec	Read Replies (4) \| Respond to of 314

The market makers did the buyers a service -- the buyers paid less due to the willingness of the MMs to sell short. The job of a MM or specialist or more generally, of speculators, is to reduce volatility by absorbing momentary spurts of supply or demand and then playing them back over a period of time (so to speak). You're familiar with this particular market (HTSF) and I'm not; I don't know exactly what you mean by "blatant manipulation" but no one advocates fraudulent activity. You ask, "If the MM's were replaced by a computer, then would this situation have come about? Or would the computer have set the bid at $10, attracting sellers, but no buyers?" I don't know what you mean by the computer setting a bid -- backed by whose money? If you mean a computerized MM, backed by cash, I withdraw the question (although such a program which set a bid of $10 in this particular case would run out of cash pretty quickly :)