Worked for MM's before

[ToddCT]

Some of the comments about MM's on this and other boards are getting out of hand. I have worked for MM's before and I know how they work and how they operate.

As in any industry their will always be the bad apples that will ruin things for everyone, and the Financial Services industry has the greediest bunch of animals I have ever met.

Saying that you still can not group all MMs' in that same boat. The MM's are needed to make your trades. I do wish that they would move to an electronic market place where we could only trade with otehr shareholders, but then the trading volume would be about 10% of what it is now. The MM's are needed to keep the markets moving and to supposedly keep things "fair" and "accurate"

The Firm I worked for did Market MAking for mostly convertable bonds, but they also did it for some OTCBB stocks. (I will not mention which ones) I was a CPA at the company and saw every trasaction that occured. Any reputable firm has a compliance department that would halt naked shorting activity within 3 days of it occuring.

Again saying that I do believe that companies do not respect the "penny stocks" and would hold shorts attempting to "kill" these companies and keep the cash that the shorts raised indefinitely.

In conclusion: If there is a Short problem in the markets it is only with a few comanies not the industry as a whole. The SEC does need to watch them more closely to ferret out these bad apples.

T

[fastwalker]

Nice comments Todd.....the majority of members here, at least understand the NSS and short selling, as separate issues..of course when the discussion is entered on MMs, it's a given , we, at least here, are talking about Jeff and the "known" MMs, and not legit MMs, that we realize are not problematic..tO our curent NSS situation..

Thanks for the clarification... I would be cautious of saying the same and or ID yourself as a former MM on the other boards...some of those people are crazy and some really do carry the crazy gene...lol

[ToddCT]

I know that some of the people who trade penny stock truly believe they will be millionaries overnight if it were not for the MM's. There is a dose of reality that some ppl need.

I do own CMKX and I do believe that it will be worth maybe 50x what it is now, anything above that is pure speculation and I am not counting on it. Granted even my 50x will be in maybe 2006 or 2007.

But if you include all of the other companies together, then just maybe it will get me very very close, I am not sure. But most likely when the stock moves up into the .0020 range I will start to sell a small portion of my holdings, and then sell more at .0030 and so on.

Everyone should have an exit stratagy when they buy any stock and KEEP TO THE STRATAGY unless dramatic changes occur, which is rare.

Newbies, please try to learn from the mistakes of others not follow in their footsteps.

T

[stevpot99]

so how do you explain EFGI coming on as a mm 2-3 weeks ago from no where and sitting all by himself most of the time on an ask of 0.0002 and selling 10's of billions of shares. where is he getting them from and wouldn't it be more profitable to let the price go up and sell all these shares

[ToddCT]

You don't know who is buying or selling what shares, you can't say if a MM is the buyer or seller, you only see volume. You are assuming too many things.

T

[bullit]

todd says:
"I know that some of the people who trade penny stock truly believe they will be millionaries overnight if it were not for the MM's. There is a dose of reality that some ppl need.

I do own CMKX and I do believe that it will be worth maybe 50x what it is now, anything above that is pure speculation and I am not counting on it. Granted even my 50x will be in maybe 2006 or 2007.

But if you include all of the other companies together, then just maybe it will get me very very close, I am not sure. But most likely when the stock moves up into the .0020 range I will start to sell a small portion of my holdings, and then sell more at .0030 and so on.

Everyone should have an exit stratagy when they buy any stock and KEEP TO THE STRATAGY unless dramatic changes occur, which is rare.

Newbies, please try to learn from the mistakes of others not follow in their footsteps.

T"

Hey Todd, please tell me where you came up with your formula (50x) - just curious - are you sure it won't be 49x or 51x?

[ToddCT]

That is my estimate, I believe it will be between 45x and 55x. Again just my estimate.

T

[Warren]

Posted by: stevpot99 Posted on: Today at 10:47am
so how do you explain EFGI coming on as a mm 2-3 weeks ago from no where and sitting all by himself most of the time on an ask of 0.0002 and selling 10's of billions of shares. where is he getting them from and wouldn't it be more profitable to let the price go up and sell all these shares
Posted by: ToddCT


The thing that I and a few others have seen, closely resembles a margin call to a hedge fund. MMs will allow them to hold a short position, as long as they let them (the MMs ) hold enough of their cash.
We saw trade of .0005 go through with no fluctuation of pps, Then it dropped one point at all cost, it was pretty clear that they could of gotten .0005 yet they lowered it to 4. Then we saw it drop to 3 then 2 under the same circumstances.
I think that who ever is holding the short positions for the hedge funds has been warning them about the amounts of funds nesassary to hold the short position at this price level, hence a margin call on the hedge funds.

This is just a possable observation.

To answer the thread started, I beleive most MMs to the tune of 90% of them that trade OTC stocks regularly short them wiith no intensions of buying them back. The reason being is the law gives them the right to do so. 10% is allowed. You can legally sell 10% more shares than exist. Wouldnt you like to be able to sell 10% of the shares of on every company traded. Talking about big bucks. Yes you buy back some and sell some, but you hold those short positions, because what you sold you do not ever intend to buy back.
Now the problem is this. Your buddy trading next to you wants his share of the 10% that he never has to buy back and his buddy and so on. We have 20 something MMs on CMKX who basically all want their fair share of the trading. They all want their fair share of the 10%. Where you are not suppose to keep a short inventory indefinately, you can not litterelly say how short you are.
Now the way most MMs trade, they short stocks and recoup them. MMs do not usually go long on stocks. They short and recoupe them, or try to recoupe them.

Now take 20 MMs trying to short CMKX shares and recoupe them. All or most wanting their fair share of the 10% buffer. Just with this you can see the failures of the laws. You can also see how the MMs themselves could of dug themselves a deep hole. Throw in a hedge fund shorting CMKX.

Just more thoughts and observations

[ToddCT]

First of all, this 10% rule is nothing I have heard of and I do know alot about MM's, it is all BS in my eyes. I saw a person post it a few days ago and now all of you think this is law? do some DD and figure it out.

The true law is that MM's are allowed to short a stock with the intension of buying it back from someone else before the date of record, so they ahve 3 days of float to use the shorted money. Now from the perspective of CMKX, I can see how the MM's might be trading back and forth amongst themselves to keep the 3 days alive each time but that would mean that the most the short position could be is about 9b shares, as an average ov about 3 b trade each day.

I do not believe that their is this 1 trillion share short in this stock, the price is so low because the OS is 800 BILLION shares, come on not even microsoft or Intel has that many shares out there.

Also if this 10% rule was true then why doesnt everyone in the world jsut openm a BD and take 10% of the shares of each company then close shop and declare bankrupsy, move to switzerland and live off of the billions you stole, this is a proposterous rumor that is being spread around.

Get your facts straight before you start passing rumor as fact.

T