Re: Bob may be right
in response to
by
posted on
Nov 17, 2009 11:28AM
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I hold in my hands a valuable napkin made of paper.
What makes it valuable?
I sell it to you for 25 cents and you sell it back to me for 26 cents. I sell it you for 27 cents and you sell it back for 28 cents. I sell it to you for 29 cents and you sell it back for 30 cents. We are brokers and it does not cost us to place these trades. Eventually we get the napkin up to 51 cents. This time we stop selling it back and forth and let a market participant buy the napkin. We then split the 26 cents and let the market return to normal. Over and over and over and over again. Gradually the price rises but who cares as long as there is low volume we can control the market.
The reverse can also be done.
The same thing can be done to the down side only the last action is a 'buy to cover." The excess from the original short sale is split and additionally the stock is depressed.
This cannot be done when there is substantial volume in a stock.
Is it being done....I can't prove it. But the price would be depressed by any such action and any short position would be closed regularly so it wouldn't show much for record keeping purposes. On the short side the price can't be pushed down very far at a time as a large steady (as in repeated buys) buyer could come in and put the game in jeopardy. Just a penny or two at a time, but price can be suppressed to such an extent that individual buyers stay away from this "going nowhere" stock. Even the steady buyer will be overcome by this game when he stops buying unless others join in with him. That is why the sector needs volume and it will come it is just hard to say when.
It's called, "I'll show you who controls this stock's share price."
P.