RE: HE126 Jul 2024 14:09
Re: market makers. I found this on Reddit (trying to understand what they do)
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3 yr. ago
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Confessions of a Market Maker - 7 year old forum entry explaining the whole GME saga
💡 Education
Found this forum entry on investorshub totally by conicidence and its some confession from somebody who worked for a MM in the 80s and i couldnt belive how many simillarities there are now nearly 30 years later.
Here are some goodies that i found :
Another way is by running the stock up in the morning, averaging up their short then use the above technique to walk it down in the afternoon.
Hopefully after doing this for several days, it will demoralize the buyers. The volume will dry up and the sellers will materialize thinking that the game is over.
This inherent power of position enables the MMs to move the markets at any time up or down. As a result, the only way to draw them out of their favorable position is going long. Now this does not mean just any company but to effectively nail the MMs, Longs must find the great company on the floor and accumulate long before the MM tactics and games begin.
or also another one
Contrary to popular opinion, MM usually Do Not Cover in Fast moving markets either Up or Down if they are short. They Short More. They usually try to cover after the frenzy is out of the market. There are many other techniques they use but the above are the most popular. This technique works about 9 times out of 10 particularly in a BB market. However that is because 9 out of 10 BB stocks are BS. Remember what I said above. Most MM's don't have a clue as to the value of a Company until they get trapped. If the Company has solid fundementals and a bright future. Then the stock will do very well. And the activity that caused the situation will prove to even help the future stock activity because it created an audience."