RE: New Article on TBP14 Sep 2018 06:39
FastMoney - no remember that there are multiple Market Makers, if someone amongst them is taking a risk by taking on a short position then it is likely to be just one of the MMs not all of them equally. This would presumably be the MM who thinks they have the best chance of getting cheap shares out of a matey warrant or share holder.
If this Market Maker (Mr X) wanted to hole up and hope that the price moves down so that they can either buy cheap shares from the market or persuade their tame (but naive) holder to sell on cheaply, then they can do this by simply increasing the spread that they offer and at this point other Market Makers will come to the fore to make a more normal market. As a result the advertised spread or spread in real trade prices may not bear any signature of the fact that MM X has holed up and is waiting it out.
The analysis that can be done on trade prices (eg like that shown on TBP) can only determine the nett flow of shares between all Private Investors and all Market Makers - so it can only tell you the sum of all of the MM positions. At present it appears that at least one of the Market Makers has an open short position but cannot tell you which one. I suspect that if the short position were pointed out them then the other market makers would have their own suspicions but I would guess that they don't habitually track each others short positions as it takes a lot of work.
It is always nice to be helpful and make it a little easier for everyone to see the game that one of the MMs might be playing.
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