MOFBIE.TEC
Posted by blackdog
|
Re: MOFBIE.TEC April 24, 2012 07:11AM |
admin, why remove the market maker completely if you still think that they could go either way (at least in the case of NZTE and TEC stocks)? And if they're certain why not close the stock rather than remove the market maker (for MOFBIE.SCIENCE and MOFBIE.BUILDING)? Whichever way you interpret the judging criteria, either the outcome is certain or it's not, but removing the market maker is just sending a mixed message.
I've noticed that on stocks where the market maker is removed (including these) that it pretty much kills trading activity, distorts the market price and makes it extremely difficult to cash out even at unfavourable prices. In my case I'll soon be unable to trade for a couple of months as I'll be going overseas, so I don't want to hold stocks long term - something I didn't think would be a problem for these stocks when I was trading them this morning.
There also seems to be some manipulation on the MOFBIE.NZTE stock, as three times today someone bought a single stock at $0.999 or higher, when all the other trades today indicate the price should be quite low. I'm not sure what the motivation is here, but clearly it's not an accurate price and is an example of the issues with removing the market maker.
More generally, on the topic of removing market makers: I understand the motivation behind doing so in cases just before an announcement is made (ie, to reduce losses to iPredict). However I would argue that the hours before an announcement are often when it's most useful to have an accurate market prediction as this is when there's the most interest. Perhaps using a thin market maker would be a better compromise (with 1 stock per price point), as has happened in the past? It would (typically) reduce losses by 90% compared to keeping the market maker in place normally, but still allow the market to give an accurate prediction close to the announcement. Of course, this doesn't apply in this situation since it was done quite a while *after* the announcement, after the market maker had already made most of its losses. Removing a market maker from a stock a significant time before it is due to close ties up capital and is quite frustrating.
For the record, I agree with blackdog and eeyore regarding the market maker density earlier today. The density you set it to in response to those comments seemed appropriate.
Edit: On second thought, one possible reason for the odd trades on MOFBIE.NZTE might be to set an unrealistic initial price should the market maker be turned back on. If you do, perhaps the last traded price prior to it being turned off would be better for iPredict's coffers.
Edited 2 time(s). Last edit at 04/24/2012 07:20AM by hmonkey.
I've noticed that on stocks where the market maker is removed (including these) that it pretty much kills trading activity, distorts the market price and makes it extremely difficult to cash out even at unfavourable prices. In my case I'll soon be unable to trade for a couple of months as I'll be going overseas, so I don't want to hold stocks long term - something I didn't think would be a problem for these stocks when I was trading them this morning.
There also seems to be some manipulation on the MOFBIE.NZTE stock, as three times today someone bought a single stock at $0.999 or higher, when all the other trades today indicate the price should be quite low. I'm not sure what the motivation is here, but clearly it's not an accurate price and is an example of the issues with removing the market maker.
More generally, on the topic of removing market makers: I understand the motivation behind doing so in cases just before an announcement is made (ie, to reduce losses to iPredict). However I would argue that the hours before an announcement are often when it's most useful to have an accurate market prediction as this is when there's the most interest. Perhaps using a thin market maker would be a better compromise (with 1 stock per price point), as has happened in the past? It would (typically) reduce losses by 90% compared to keeping the market maker in place normally, but still allow the market to give an accurate prediction close to the announcement. Of course, this doesn't apply in this situation since it was done quite a while *after* the announcement, after the market maker had already made most of its losses. Removing a market maker from a stock a significant time before it is due to close ties up capital and is quite frustrating.
For the record, I agree with blackdog and eeyore regarding the market maker density earlier today. The density you set it to in response to those comments seemed appropriate.
Edit: On second thought, one possible reason for the odd trades on MOFBIE.NZTE might be to set an unrealistic initial price should the market maker be turned back on. If you do, perhaps the last traded price prior to it being turned off would be better for iPredict's coffers.
Edited 2 time(s). Last edit at 04/24/2012 07:20AM by hmonkey.
Sorry, only registered users may post in this forum.
Click here to login