GREY:GYPHQ - Post by User
Post by
davetrouton Apr 16, 2014 11:43pm
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Post# 22461644
MM discourages trading volume by Bid/ Ask spread
MM discourages trading volume by Bid/ Ask spread Cardinal: your own research validates my position that our market maker is part of the problem. By your research, the MM should try and create high volume with an attractive spread between B/A With a spread of 52% we had almost no volume. I put in a buy at .075 when bid was .065, representing a 15.4% profit to the MM. He didn't execute the transaction--he wanted more profit, as opposed to providing liquidity and creating volume.
But who is going to buy when they lose 33% on the sell if they need to get out. And, if there is no volume, everybody knows YOU CAN'T GET OUT without the MM screwing you even more severely, which this guy does regularly. With no volume and a huge spread no serious investor will want to buy. On a $2800 dollar sale a while back, the MM executed 1/4 of the shares to sell and then dropped the bid down 15%. A $700 sale and we're down 15%.That's chicken s___ in anybody's book. What would he do on a $10,000 sale?? Drop it 40%, 50%?? The market cap is $13 million.
Today he finally dropped the ask to .07 and suddenly shares traded. Not a lot, but it encouraged two buys and we showed some volume.