RE: Worth a repost.24 Jun 2021 11:27
Part 3
Boy, when this happens, the MMs are not very happy campers. The investors and traders are
supposed to be doing that no them. Now it becomes time to pull out every trick and tactic in the
book in order to attempt to get a Bear Raid at every dollar mark or percent from where the stock
started. Could be a penny in smaller priced securities?
What MMs do is give you a chance to make a small amount of money for your momentum and day trading style by shorting it at these levels and trying to get a bear raid each time. Each failure is compounding the MMs short position so they let it go to the next level.
Now come more deliberate tactics MMs use to coerce Bear Raid or panic selling. Once the MM is caught short and the strength of the buy is overpowering the MM will want to cover his short position.
So the MMs call up one of his friendly MMs and says some like "the weather is sure rough today." The MM along with the other "friendly MM initiates a down tick about the same time. Now this can also be done with a certain amount of shares such as an infamous 100 shares flag.
This down tick gives the illusion of weakness designed to hopefully begin the bear raid of
selling. The fickle, fearful, day trader, momentum and short term begin to sell out allowing the MM to cover his short position at lower prices. They will move it down quickly to get it to a price of least financial damage.
Problem they have is long-term investors in the OTC BB. They start accumulating and buying comes flying in when they take it too far thus the MMs took it to the point of volume
again and not only investors the other MMs step in the make money on the spread.
Alas the poor MM does not get to cover. Now comes various tactics like stalling, boxing, or even
locking the Bid and Ask for a while. Of course, MMs aggressively deny any sort of collusion designed to fix quotes or spreads, but a recent SEC investigation tells another story.
MMs have a vast resource of tactics and it would take probably more than my lifetime to figure
them all out. So how do investors somehow manage to overcome the obvious deception in OTCBB arena? One answer is indirection trading style by going long which the MMs do not expect.
In the war between investors and public companies on the OTC BB vs the MMs, if the MMs have all the advantages due to position or other factors, direct confrontation such as momentum or day trading hitting the stock is a definite death sentence.
Continued