HUMBL Inc (HMBL)

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Sad that after all these years you still do not understand what a MM is legally obligated to do.

Michael O'Connor
July 20, 2021·2 min read
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The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

Photo by AbsolutVision on Unsplash

While a vast number of investors have at least a ground level understanding of how stock exchanges work, others may not be as familiar with the market where OTC securities efficiently trade.

In a recent blog post, Cromwell Coulson, president and CEO of OTC Markets Group, the company that operates the regulated electronic market where SEC-registered, FINRA-member broker-dealers can trade OTC securities, explained how the market works.

OTC Trading

Trading on the OTC Markets simply means a security is traded directly between competing broker-dealers rather than trading through a centralized exchange. These broker-dealers, who buy and sell on behalf of clients, will publicize quotes for a specific security.

Competing broker-dealers or ‘market makers’ display the price at which they are willing to buy (the bid) a security and the price at which they are willing to sell (the ask). “Industry-leading market makers, such as Citadel, GTS, Jane Street, StoneX, Susquehanna/G1X and Virtu Financial (NYSE: VIRT), make up the diverse community of 90+ regulated broker-dealers providing continuous liquidity and execution services for investors,” Coulson said.

These trades are executed through OTC Link® ATS and OTC Link ECN, highly-regulated registered trading platforms that connect broker-dealers to one another. Buy and sell orders are sent electronically through these systems to be executed at the best available price.

.As for the possible $5 million loss, it is a pittance for the MM's, look at the dollar volume of Citadel in 2022 and remember there are many more MM's.

Citadel Securities raked in a record $7.5 billion in 2022, capitalizing on last year’s volatility and raising its presence as one of the largest trading units in the US.

Altogether there is about $5 billion traded annually on the OTC.

https://otce.finra.org/otce/marketStatistics

Again, $5 million is beyond comical.