RE: Day of small trades22 May 2025 20:09
JG Im share trading, every time someone sells a share, someone else must be buying it—it’s a one-to-one transaction. The seller might be locking in profits or cutting losses, but the buyer is now taking the opposite bet: they’re hoping the share price will rise so they can sell later at a profit. In this way, every trade represents two different views on the future value of the stock.
Now, when it comes to market makers—entities that provide liquidity by always being ready to buy or sell—they can play a more strategic role. If there’s a large buy order coming in from an institution, a market maker needs to gather enough shares to fulfill it. But they can’t just buy a huge amount at once without pushing the price up.
Instead, they might allow or even subtly encourage the price to drop, shaking out retail investors or triggering stop-losses. This creates a wave of selling, giving the market maker a chance to accumulate shares at lower prices. Once they’ve gathered enough, they can then fill the big buy order—often just before the price starts rising again.