So pushing paper is a risky business, I wonder if this just reflects their MM side of the business or if they have other departments that might have caused their decline. I can't tell by this data.
Yes I understand they are small compared to those other MM’s you mentioned. But what I am trying to determine is how a Market Marker loses money.
The overhead of maintaining an office is minor if you compare it to other types of business.
As Bo pointed out, they can play the market from a vantage point not enjoyed by other traders/investors. They buy at a discount (the bid) and sell at a premium (the ask). They have a distinct view of the market using level 3 tools and are able to see runs or stalls in the market judging accordingly to the order volume or lack thereof.
The above mentioned advantages make it almost impossible to lose no matter what size of the operation might be unless something else comes into play that we don’t see in these reports.
Now if you were able to buy at the bid and sell at the ask, what would your P&L look like compared to what it is now? With just this advantage I know mine would look completely different.