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TRADER 1: Ok, I was, it's just that, I mean I got long the stock trying to move it with my retail when you offer it down. And I don't have any room to pay out the credit to my broker. Then I get stuck, stuck long 10. You offer it down. Then I end up having to go out and hit the stock. And I mean it's not doing anybody any good. |
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TRADER 2: Alright I hear you. |
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TRADER 1: Just I understand with these guys you can't communicate with them. But if in the future, if you'd like to try, think it would make us both a lot more money. |
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Trader 1 later complained to a trader at another firm about Trader 2: "You know, we try to do the right thing. We keep an orderly market. And this guy just ****** all over us." |
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In this situation, Trader l's desire to keep the quotes from dropping while making retail sales was inconsistent with the interests of the customers to whom his firm was selling stock. |
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The Courtesy Of Mutual Cooperation |
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Market makers relied on each other to provide order flow, information, and cooperation to help them trade positions profitably. In one taped conversation, two traders discussed the benefits of sharing information and cooperating: |
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TRADER 1: you've bailed me out a couple of times too. That's the game. |
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TRADER 2: Yep. |
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TRADER 1: You know? And, uh |
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TRADER 2: And by you helping me out in some of these other ones. I mean, I'll always make you money in the Vicor [VICR] that, you know, anytime you get a position and stuff like that. That's, you know, that's nice that way. |
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TRADER 1: Help each other. I'm more than, even if I have to lose a lot of jake [money]. I don't care. |
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TRADER 2: Yeah. |
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