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Re: deanna-hopkins post# 60053

Thursday, 07/13/2017 3:16:36 PM

Thursday, July 13, 2017 3:16:36 PM

Post# of 64475

This just means WE are the market makers



Yes, good point! Just remember the risks associated. You need people interested so you can execute at both the bid and the offer. As a market maker you want to capture the spread. You need turnover. If there's no demand and you hit zero you'll get stuck with inventory you can't get rid of until buyers come along, and at the lowest prices at that. Think about it. If you're the only buyer and sells keep coming in you will eventually have to lower your bid when you've had enough. If you lower your bid, you're no longer supporting your existing inventory at prior prices, but you're capital is finite and you'll use it all up if you keep buying down enough levels. It's a tricky business. You have to know when to stay firm or move out of the way on both your bid and your ask. Furthermore, you can only play the long side - no shorting. A risky proposition, my friend.