Another one for the guys in the city.

[craig-A]

Lurked around a couple of share trading sites and keep seeing MMs mentioned, not always in a nice way it has to be said.
What/who are they and how do they influence share prices? Does anyone regulate these guys?

Thanks in advance.

[Skipppy]

Market Makers?

[Trommel]

[limpsfield]

craig-A said:

Lurked around a couple of share trading sites and keep seeing MMs mentioned, not always in a nice way it has to be said.
What/who are they and how do they influence share prices? Does anyone regulate these guys?

Thanks in advance.

Market makers - and it is one of the popular consirpacies that MMs will move the market against the small investor.

e.g. "I have just bought 5,000 shares in HokeyCokey Oil company at 3p. It has dropped to 1p. But it is not a real loss as it is just the MMs shaking the tree and trying to get me to sell my shares to them before the inevitable rise to £5 per shares."

Another great example of financial bulletin board muppetry

[Horse_Apple]

craig-A said:

Lurked around a couple of share trading sites and keep seeing MMs mentioned, not always in a nice way it has to be said.
What/who are they and how do they influence share prices? Does anyone regulate these guys?

Thanks in advance.

The term MM is used by an internet poster to indicate clearly to other users that they have absolutely no idea what they are blathering on about. Very useful.

[A.Wang]

Here's a semi-serious reply.

MMs are "market makers". The concept is quite legal and proper - certain firms are designated "market makers" in particular instruments by the exchange, usually in return for lower fees or other benefits over ordinary members.

These firms are obliged to provide liquidity in particular instruments, maintain the bid/ask prices on them and they are obliged to buy/sell at their posted bid/ask prices.

As to how they can influence prices and, by extension, the markets? Well, they have the right to price instruments as they see fit, and will set prices to suit themselves/their clients. I doubt they're moving markets intentionally, but on quote-driven markets, the market makers have a lot of influence over pricing and the direction of those markets.

Now, has anyone got a job for an exchanges IT specialist?

Edited by A.Wang on Tuesday 27th October 11:01

[Horse_Apple]

anonymous said:

[redacted]

Typical Tonker, holding out on the stock name so he can pile in while the MMs are shaking the tree.

[Dupont666]

anonymous said:

[redacted]

If they are going to fall apart and default then surely the CDS is you friend and an easy way to make cash.

Some wise people did on Lehmans.

[Dupont666]

anonymous said:

[redacted]

hahahaha

I think I may just have pissed myself laughing!!

I like the joe bloggs when they try and do something cause a keyboard warrior/media person says so.... I bet you can get some real market manipulation done that way if done correctly... not that people have been done before of course

[anonymous-user]

A.Wang said:

As to how they can influence prices and, by extension, the markets? Well, they have the right to price instruments as they see fit, and will set prices to suit themselves/their clients. I doubt they're moving markets intentionally, but on quote-driven markets, the market makers have a lot of influence over pricing and the direction of those markets.

They have to price competitively, or they won't be around for long. If those on the other end don't like the prices, they won't trade at them.

[A.Wang]

ZondaMark said:

A.Wang said:

As to how they can influence prices and, by extension, the markets? Well, they have the right to price instruments as they see fit, and will set prices to suit themselves/their clients. I doubt they're moving markets intentionally, but on quote-driven markets, the market makers have a lot of influence over pricing and the direction of those markets.

They have to price competitively, or they won't be around for long. If those on the other end don't like the prices, they won't trade at them.

Agreed, although I was implying in a tongue-in-cheek kind of way that they agree with other MMs to quote at certain prices/price ranges, so their bids/asks are roughly the same as other MMs.

Of course this never happens in practice...