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Cline Mining Corporation T.CMK



TSX:CMK - Post by User

Post by bond46on Feb 10, 2013 6:05pm
421 Views
Post# 20965692

Setting the record straight

Setting the record straight

I detected there is a widespread confusion as to who is who, what is what and who is doing what in the trading universe we live in. This was triggered by Summer's 22 claim that for "every seller there is a buyer out there" who sees value in the CMK stock. That claim I disputed and I ventured to say that the buyer on the other side may not necessarily be a person who recognizes the value in the stock and buys it; the buyer may be the market maker that works for the Investment House. The market maker, or the computers these days, take the opposite side of a trade in order to maintain liquidity in the market. So when we sell and there are no buyers out there, the market makers buy the stock at a discount in order to sell it to us later at a higher price. And when we buy and there are no sellers, they fill the gap and sell us stock from their inventory. The market makers may have 10millions shares or more of inventory which is completely paid off over time through their buying and selling for their accounts. So they use the inventory as an instrument to generate revenues for the House. The question of loss or gain is irrelevant to them because the inventory they own is completely paid off, so it does not matter if they lose now by buying high and probably selling low a while later, as long as they maintain liquidity in the market because that is their mandate; to create liquidity in the market.By buying and selling for their account, these people may create the impression that there is buying and selling activity in a stock by participants, while in actual fact there is none. That is more evident between the hours of12pm and 2pm when almost all trading in the market slows down. That is why never place trades during these hours, especially market orders, or you'll be slaughtered. So the real scamsters and the money makers are the investment houses themselves if you're looking for scamsters. The caveat here is know who is in the other side of the trade when trading because as one trader said" trading is the transfer of bank accounts of people who don't know what they are doing to the bank accounts of people who do". GLTA

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