Member Info for Peoplepower1

How do market makers set prices?

Market makers provide two prices when approached by a broker.

One is the price at which they are prepared to buy an asset.

The second is the price at which they are content to sell.

Like any other product or service that is traded, the prices set by market makers are influenced by the level of supply and demand.

What is a market maker?

Market makers are third parties that provide the means for people to buy or sell assets, shares.

There is nothing stopping two parties from directly carrying out a trade.

But what happens if a buyer or a seller can’t agree on the price or quantity of an asset they wish to transact?

This is the situation in which a market maker performs a critical role.

Market makers hold an inventory of a particular asset.

They either sell from this when they receive a buy order, or they add to it when they receive an instruction to sell.

This ensures that financial markets can keep moving and that a buyer and a seller can always find someone to trade with.

Market makers come in a variety of sizes.

They are often banks or brokerage houses, though they can also be individuals.

When a buyer and a seller wish to make a trade, they contact their broker, who in turn gets in touch with a market maker.

The latter then provides quotes on the amounts at which they will buy or sell a particular asset.

Https://www.fool.co.uk/investing-basics/understanding-the-market/market-makers/

More sells than buys means there are more shares sold than bought on the day and vice versa.

On Wednesday 10 May 2023n something over 37m boohoo shares changed hands.

According to the Boohoo shorts Eleva Capital upped their Boohoo short by 0.28% on the same day.

I think 0.28% of Boohoo shares is about 4m Boohoo shares.

So Eleva would have had to sell 4m Boohoo shares on Wednesday 10 May 2023.

However, there were over 37m Boohoo shares changed hands on this same day.

Do you think the 4m sell by Eleva is what caused the share drop for Boohoo on Wednesday 10 May 2023?

As I've already said over 37m Boohoo shares changed hands on Wednesday 10 May 2023 and for the share price to go down there had to be much more sells than buys.

Think about it.

Work it out to see if it's possible or not.

It doesn't matter who is buying or selling a share, the fact is more buys push the share price up and more sells push the share price down.

This is the reality of the stock market.

If shorters decide they want to take out a short on Boohoo ,then yes they will have to sell the number of shares for their short and yes if the number of shares they are selling is more than the number of buys that day then the share price will go down.

However, this is legal for them to do this.

Shorts are part of the share market.

If you think shorts are manipulating the share market to get the share price down then you need to complain to the FCA. The FCA don't have the staff to watch the share market and all the shares every day.

There's a whistle blowing email address for the FCA which is whistle@fca.org.uk Use this and do something about it if you think there's manipulation. It's your duty and responsibility to do this, if you believe there is manipulation.

Anyone who buys shares or sells shares can ask for the recording of the share trade to be delayed so it is not reported at the actual time the trade took place.

Buys are at a higher price, sells are at a lower price.

They are not at the same price.

If the share price is going up, then there are more buys than sells.

If the share price is going down, then there are more sells than buys.

I don't guess where the buys or sells are coming from.

The intraday chart tells me what I need to know.

I don't assume anything.

I look at the intraday chart to see what's actually happening.

Always do your own research

I use the intraday chart because the London Stock Exchange doesn't allow the recording of share trades as buys or sells.

So this website has to guess which trades are buys or sells.

The Boohoo Intraday Chart which you can get above by clicking on Boo Share Charts and then on Intraday.

This shows you when there are more buys than sells because the share price goes up and also when there are more sells than buys because the share price goes down.

More buys than sells overall for today so price goes up.

The line of least resistance today is upwards which means there have been more buys than sells.

Check the Boohoo intraday chart for today.

Gross margin is too low - which has always been Asos’s problem, and the reason it’s never really made any sustainable profit or cashflow.

42.9% adjusted gross margin is just too low.

It needs to be nearer 55% in this sector to make a decent profit.

Also, the reported gross margin (after stock write-offs) is even worse, at 36.1% - which simply is not a viable business at that level.

Some thoughts on gross margins for Asos and online fast fashion companies from Stockopedia which you might like to read.

Always do your own research.

Https://www.lse.co.uk/ShareChart.html?sharechart=BOO&share=Boohoo&chart=intraday

Check out the share price movements today on here.

When the share price is going down then there are more sells than buys and when the share price is going up then there are more buys than sells. The sells won out at the end of the day.

T4g - have a look at the intraday chart on this website and you'll see the ups and downs of the share price for yourself.

The downs were when there were more sells than buys then there were some ups which meant more buys than sells and so on. The sells won out at the end of the day.

I'm so sorry for all holders on here.

The line of least resistance is downwards which means there were more sells than buys today.

The London Stock Exchange doesn't allow the recording of buys and sells for any share trades whatsoever, so you have to take what this website guesses as possible buys/sells with a pinch of salt.

Fear, greed and hope are our biggest enemies when it comes to shares.

The London Stock Exchange doesn't allow the recording of buys and sells for the trading of shares.

Therefore the buys and sells on here are simply guesses by this website because the London Stock Exchange doesn't allow buys and sells to be recorded at all.

No-one knows for sure what thye are because they are simply guesses based on the bid and ask price at the time they're recorded on this website.

If it's a late reported trade, then no-one knows what the bid and ask prices were at the actual time of the trade.

This website lse stands for London South East.

JustJames - not all shorts are recorded. Only those over 0.50% are recorded, so you need to take the recorded figures with a pinch of salt, so to speak.