Who Can Sell Micro-Cap Stocks To Me?
A broker-dealer or a market maker can help the public trade micro-cap stocks. E-trade or Scottrade are examples of reputable online brokerages that can and do help investors buy and sell micro-cap stocks.
What Are Market Makers?
In the context of micro-cap stock investments, market makers are brokerage firms that remain prepared to buy and sell a specific stock on a frequent and continuous basis at a bid or ask price.
Market makers are in constant competition with one another for orders to buy or sell at prices publicly quoted. Market makers must, on the whole, be prepared to buy and sell at least one hundred shares of a stock they develop a market in.
Resultantly, a substantial order requested by an investor could possibly have to be filled by numerous market makers at potentially different prices. If, for example, a broker seeks to buy a stock but there are no offers to sell it, the marker maker will fill the order himself by selling shares from his own account. This works in reverse too where, if a broker desires to sell but there is no buyer; the market maker then buys the shares.
Market makers have an important role to play in providing liquidity in the Over-the-counter (OTC) market, where micro-cap stocks tend to trade.
Who Are The Market Makers?
In the Over-The-Counter (OTC) market, a Market Maker is the brokerage firm or trader responsible for maintaining a functioning market in an individual stock by standing ready to buy or sell shares.
What Questions Should I Ask The Broker?
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