Does the specialists and market makers hedge their stock inventories?

?

 

yes

 

Not all.

 

i find hard to believe they wouldn't buy a put if they saw their stock sinking day after day. then they could rebalance at the end of each trading day and eat up the intraday losses/gains when it streches beyond the hedge, why they would not do this?

 

Read Cottle's book. There is a free version floating around on the net. You will get an idea of how MMs operate.

 

Can you post the link or at least offer the full name of the author and the name of the book?

 

I want it too, please....
Thanks

 

I think he means this:

Graham and Dodd's Security Analysis

 

Thanks buddy....

 

He probably means this guy:

http://www.riskdoctor.com/interview.pdf