Just trying to understand this as once again something is happening. We have 80 % buys versus 20 % sells but the SP is falling. Is this MM Manipulation to ensure potential shorters are worse off as soon as they invest? Thanks.
Totally agree with you Fatlad. Shorting on illiquid stocks is manipulative as you can move the price down because not many buyers or sellers so MMs go through Inter dealer brokers and sell to one another creating selling effect....as no real buyers or sellers (hence the term illiquuid) the price moves down quickly and then people actually do start selling. This makes it harder for companies to raise money on AIM as larger dilutions...can also cause breaches of covenants if share prices fall way too low henc triggering possible admin....very nast game and there is no fairness in it. Like playing poker really, the one with the biggest pot can outbluff all the others. It is rigged so make sure your main earner is not share trading....should be a very small part of your portfolio. Cheers
Agreed, and what's more they do it by first of all fiddling around with the Spread then arranging the SP to suit the shorters. (They consider more liquidity will prevail by accommodating the shorters). AIMO. However, as a pi over 18 yrs I invested up to £250k and struggled to make a small profit. Fed up with the rampant shorting, sadly (or so I thought at the time), I sold out earlier this year still with only a very small profit to show for all those years. Invested the bulk in property, (thank goodness). Now invest only a small amount in shares but still make a small profit. So mm's fuddling around with the SP's have lost them the liquidity of my cash that's for sure. IMO FCA are at a loss as what to do about shorting, even where it is illegal, fearing it would crash the market as shorting is so rampant. Meaning 'Shorting' will digest, (Financial Cannibalism?), or deter most eventually, (along with most of the shorters).
Well 25 years as a fund manager taught me a decent amount re the behaviour of market makers!! All I'm trying to explain is the reason for Infinis being 137p. In truth I couldn't give two hoots about a few p here and there. I can assess that when I trade. I'm more interested in intrinsic value v share price and this was at quite a nice discount and still is.
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