Stock trading tips - view stocks like a market maker
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The document provides stock trading tips and insights from an experienced market maker, emphasizing the risks of stock speculation and the importance of thorough research before investing. Key factors to consider include the characteristics of stocks, competition among market makers, volatility, and company fundamentals. It also advises on how to investigate stocks and encourages seeking professional investment advice.
Stock trading tips - view stocks like a market maker
- 1. www.investing-performance.com Stock Trading Tips-- View Hot Stocks Like a Market Maker
- 2. Disclaimer Stock speculation is very risky and may not be suitable for you Do not trade with more than you can afford to lose. Seek professional investment advice. This is not investment advice. No warranties, you are on your own.
- 3. I started in OTC Trading at E.F. Hutton in 1966 I noticed stocks had different characteristics Price Volume Spread
- 4. Stock Personalities Some were lazy and some jumped around wildly
- 5. Before NASDAQ We used the real Pink Sheets to find market makers and call three of them by phone
- 6. Deciding to make a market in a stock I used fundamentals – the company had an exciting business and future = there will be volume and price change = market maker profits
- 7. Questions I asked as a market maker First, who is my competition? What market makers were in the stock?
- 8. Types of Market Makers Volume traders Value traders Investment bankers trading their companies
- 9. Who is high bid and low offer Do these market makers have an axe to grind?
- 10. Spread and volume? How fast can you get in and out? Can you beat the spread?
- 11. Shares outstanding and float Stocks with small floats tend to be volatile
- 12. 144 sales coming? Was it a shell – barred from 144? Is the end of the holding period coming up?
- 13. Private Offerings? Look out for Form D filed with the SEC indicating private placements
- 14. Earnings Announcements On what days do earnings announcements usually hit the market? Watch for trading just before those dates
- 15. Convertible securities and warrants Look for convertible securities and warrants that could affect the market – at what prices?
- 16. Recommendations Are there research reports or investor relations campaigns? By who and how reliable are they? Press releases?
- 17. Number of Shareholders Is the list increasing for some reason?
- 18. Shorts Is there a short interest? Are they slamming the stock down or being squeezed?
- 19. Is it a reverse merger stock? Are the shell holders going to dump and how ethical are they?
- 20. Reverse splits, name changes, business changes Has the company had frequent reverse splits, name changes, changes to the next trendy business?
- 21. Insiders What percent of the company do insider hold? Are they buying or selling? Is the company buying?
- 22. Read their SEC or Pink Sheet filings What is their status on Pink Sheet?
- 23. Dilution Is the company thrifty in handing out their stock or do they regard it as toilet paper?
- 24. The Principals Are they shareholder oriented?
- 25. Reputable affiliates? Who are the accountants, attorneys, transfer agent, investor relations firm?
- 26. The Industry Is the industry popular? What is the company's competitive position?
- 27. The Chart – Tale of the Tape Where are the support and resistance levels? Is the stock being accumulated, marked up or distributed?
- 28. Anticipating news Imagine how the company might develop and what news might this cause
- 29. What am I doing here? What is my game plan for making money in this stock? Do I have an edge over others and if not, why get involved?
- 30. Rules for Investigating Dig into what you don't understand Don't stop until you are certain you have a real answer you can rely on
- 31. Learn more Curiosity may have killed the cat but has saved the life of many an investor
- 32. Learn More – Subscribe Now Subscribe to my videos and blog free www. investing- performance.com
- 33. Get my books on Amazon.com How to Find a Home Run Stock How to Pick Hot Reverse Merger Penny Stocks How the Shorts Raid Your Stock, Destroy Your Company and What to Do About It
- 34. John Lux Trader, investment banker, quantitative analyst, former OTC market maker and attorney Lux.investor@ gmail.com Copyright ©John Lux 2011