Are MM's stupid enough to show large size on the bid? Ive been watching a stock that im in, and this one MM keeps showing size on the bid, and is in fact really buying. He gets hits and just refills. I dont get it. Is this a case where an MM is working an order for someone else and just doesnt give a shit if he shows his hand and doesnt get the client a great price? Traders just keep leaning on him. Any ideas? peace axeman
Maybe he has Size for sale! Believe it or not there are BUY side traders that request him to be there for SIZE OUT LOUD for other reasons.
Do you have any examples of these reasons? If he is in fact a big seller, and is supporting the stock at this price and driving it up, it must mean he believes that the number of shares he eats will be SMALL compared to the number of shares he will be able to dump at a higher price by "scaring" the price up, then unloading his OTHER shares AND the shares he ate at the lower price. peace axeman
It's called advertising. Or he needs to control certain trading range to screw traders or get some instititional blocks printed.
Why would an institution want to show size? Every little leach day trader will step in front and they will get a worse price. peace axeman
The mere fact that we're debating if someone is buying strongly or trying to fake strength tells you not to over analyze it. Without seeing the market depth, there's no telling what's real and what's a bluff. Sort of like playing poker.
For some of these guys, getting the trade for size done quickly is more important that trying to skim a few pennies.
Unless you see the MM chasing stock up, there's nothing wrong with showing size. How else is a size seller going to know there's a buyer? If you frontrun the guy, and he doesnt raise his bid, you lose and he gets his stock too.