Stock trading tips - view stocks like a market maker


Published on

Stock trading tips on hot stocks to buy now, stock market strategy, picking hot stocks, picking penny stocks, and how to buy cheap stocks. From “How to Find a Home Run Stock” and “How to Pick Hot Reverse Merger Penny Stocks” and also “How the Shorts Raid Your Stock, Destroy Your Company and What to Do About It” all by John Lux.

Published in: Business, Economy & Finance
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Stock trading tips - view stocks like a market maker

  1. 1. www.investing-performance.comStock Trading Tips--View Hot Stocks Like a Market Maker
  2. 2. DisclaimerStock speculation is very risky and may not besuitable for youDo not trade with more than you can afford tolose.Seek professional investment advice.This is not investment advice.No warranties, you are on your own.
  3. 3. I started in OTC Trading at E.F. Hutton in 1966 I noticed stocks haddifferent characteristics Price Volume Spread
  4. 4. Stock PersonalitiesSome were lazy and some jumped around wildly
  5. 5. Before NASDAQWe used the real Pink Sheets to find marketmakers and call three of them by phone
  6. 6. Deciding to make a market in a stockI used fundamentals – the company had an exciting business and future = there will be volume and price change = market maker profits
  7. 7. Questions I asked as a market maker First, who is my competition?What market makers were in the stock?
  8. 8. Types of Market Makers Volume traders Value traders Investment bankerstrading their companies
  9. 9. Who is high bid and low offerDo these market makers have an axe to grind?
  10. 10. Spread and volume?How fast can you get in and out? Can you beat the spread?
  11. 11. Shares outstanding and floatStocks with small floats tend to be volatile
  12. 12. 144 sales coming?Was it a shell – barred from 144? Is the end of the holding period coming up?
  13. 13. Private Offerings?Look out for Form D filed with the SEC indicating private placements
  14. 14. Earnings AnnouncementsOn what days do earnings announcements usually hit the market? Watch for trading just before those dates
  15. 15. Convertible securities and warrants Look for convertiblesecurities and warrants that could affect themarket – at what prices?
  16. 16. RecommendationsAre there research reports or investor relations campaigns? By who and how reliable are they? Press releases?
  17. 17. Number of ShareholdersIs the list increasing for some reason?
  18. 18. ShortsIs there a short interest? Are they slamming the stock down or being squeezed?
  19. 19. Is it a reverse merger stock?Are the shell holders going to dump and how ethical are they?
  20. 20. Reverse splits, name changes, business changes Has the company had frequent reverse splits,name changes, changes tothe next trendy business?
  21. 21. Insiders What percent of the company do insider hold?Are they buying or selling? Is the company buying?
  22. 22. Read their SEC or Pink Sheet filings What is their status on Pink Sheet?
  23. 23. DilutionIs the company thrifty inhanding out their stock ordo they regard it as toilet paper?
  24. 24. The PrincipalsAre they shareholder oriented?
  25. 25. Reputable affiliates?Who are the accountants,attorneys, transfer agent, investor relations firm?
  26. 26. The IndustryIs the industry popular? What is the companys competitive position?
  27. 27. The Chart – Tale of the TapeWhere are the support and resistance levels? Is the stock beingaccumulated, marked up or distributed?
  28. 28. Anticipating newsImagine how the company might develop and what news might this cause
  29. 29. What am I doing here? What is my game plan formaking money in this stock? Do I have an edge over others and if not, why get involved?
  30. 30. Rules for InvestigatingDig into what you dont understandDont stop until you arecertain you have a realanswer you can rely on
  31. 31. Learn moreCuriosity may have killed the cat but has saved the life of many an investor
  32. 32. Learn More – Subscribe NowSubscribe to my videos and blog free www. investing-
  33. 33. Get my books on 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. 34. John LuxTrader, investment banker,quantitative analyst, former OTC market maker and attorneyLux.investor@ Copyright ©John Lux 2011