|
PureBytes Links
Trading Reference Links
|
Hi Everyone,
I found this on Robert Prector's Billboard and I thought it might interest
the group. I would be interested in the thoughts of the grizzled veterans
out there that know something about market makers.
This is an interesting site for Elliott Wavers. Go to
http://www.elliottwave.com and look for the Billboard link.
Terry
September 22, 1997
Hi Bob, I have a question that maybe you or one of your readers can answer. I
have tried a number of other sources with no luck: On a day when the market
crashes and sellers panic, there may be a flood of market sell orders and no
buyers at any price. On such a day, is it possible to put in limit orders for
certain
stocks and get them filled at extremely low prices? Example: 100 shares of
widely-held stock xyz at $1.00 that was previously selling at 50. I realize
that the
NYSE has specialists who normally make a market and the NASDAQ has market
makers. On a day such as October 19, 1987, though, they didn't have the
capital to
ensure that everyone got a fair price (as if they do anyway).
Rober Prector's Response:
Yes, yes yes. There are indeed times when market makers have no choice but to
step back from the market and cross orders WHEREVER THEY CAN BE FILLED. The
prices for options on October 19 and 20 were so high that the market would
have had to fall another 600-1000 points to justify them, which is exactly
what
people feared! The person who put in an "ask" at 62 for the put he bought the
previous month at 2 1/8 got filled! "Fairness" has nothing to do with it.
"The Market" means where buyers and sellers meet, and if you are one of the
few buyers, it's
your market. --RP
|