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Synergy Pharmaceuticals, Inc. Message Board

  • gselevator gselevator Apr 30, 2014 8:56 PM Flag

    Data Release Before 7am - This is What Happened Today With MMs

    This is GS_Elevator from Stocktwits.

    The sole reason why the stock did not see a good 20-25% pop in the premarket was because the data was released before 7am.

    Market makers exist for one sole purpose: provide liquidity. During extended hours, MMs maintain a wide bid-ask spread. This allows the MMs to mitigate the effects of a sudden wide price swing to one direction, especially in this industry.

    When there is binary press release and it is expected to have a significant movement in one direction like this morning, they would squeeze down the ask to prevent a major run up. Give illusion that someone is trying to sell them off so quickly in desperation. This causes other sellers to lower their "ask" PPS and bidders to retract. This is critical for MMs, who serve as liquidity bank, and along with their high frequency trading partners, can incur losses when their are sudden price movements. Since they profit off of pennies movement, even fractions of pennies, this sudden pop will force them to engage in buying and selling activity that is much higher than they are "accustomed" to. This becomes excessive risk for MMs and HFTs.

    Back to the significance of 7am. Before 7am, there was no "real" volume, no institution. NO ONE. As soon as MMs were notified of positive data by automated algorithm & physical technicians, MMs would have picked this up, flagged in their system as a potential threat.

    To MMs and HFTs with both long AND short positions was a threat. As soon as it was flagged, they immediately closed the bid-ask spread and executed couple more thousand shares in that range. This on going trading volume with tight spread, on their machines, created illusion to public that this was indeed fair market price, causing panic. Management should have understood this scheme and waited for after 7am to allow retail & institution's natural bid-ask.

    All it takes is 20 thousand shares and a perfect timing. This is their game, and this is exactly how they rig the market.

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    • Whatever dude true or not, your speculations are just hour extremely bullish, half an hour later calling everyone to dump, 15 minutes later BUY, 10 minutes later SELL, for months now. It'd be nice if you just leave this stock alone, getting tired of your stock twits spam 17 times a day. Worst thing is you say who followed you and bought at 3.80 made 30%, you've been telling people to buy even back at 6. Master of hindsight.

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