RE: Vanadium prices9 Oct 2018 16:45
knuttie - what happens if there are no sellers ? - firstly the market makers move the share price up, to make sure that buyers are paying top dollar. Then if they cannot get any sellers to turn up they have a choice -
1) continue to move the SP up in the hope that they can get sellers to materialise at higher SP levels. This is a risk because they may discover that they just attract in more momentum traders and they are in even more of a hole.
2) they can chose to initially sell what they do not have and then walk the price down later in the day in the hope that they can pick up the shares from day traders who may have got themselves a percent or two or anyone else who cannot bear to see the share price going down. This will allow them (the MMs) to pick up shares at much less than they sold them for earlier in the day. They have a bit of a problem on their hands if the buying continues - then they have to go to plan 2B)
2B) ok so we weren't able to close our day short in the same day - we now need to decide if we are prepared to try and outwait Private Investors, maybe we didn't successfully get the chance to walk the price down today, but tomorrow we'll try again, and we'll continue trying until all these pesky buyers have run out of cash, or we can trick some T20 holders into bailing out with a few percent less profit than they could have got (even better if they are facing a loss from 20 days previously). If this doesn't work, then 2C)
2C) Pick up the phone to your friendly short seller and tell him that there is something wrong with the share and now is absolutely the best time to take those mug private investors for a rollercoaster ride. Out of shorters or Private Investors you're pretty much bound to be able to get shares cheaply out of one or the other. This is technically called injecting 'liquidity' into the market.
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