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Not really. The word you are looking for your second example about sheep is simply - speculator. Not market maker and not even arbitrage. From [1]:The most com
by thisisit 9y ago
Not really. The word you are looking for your second example about sheep is simply - speculator. Not market maker and not even arbitrage.
From [1]:The most common type of market maker is a brokerage house that provides purchase and sale solutions for investors in order to keep the financial markets liquid. A market maker can also be an individual intermediary, but due to the size of securities needed to facilitate the volume of purchases and sales, almost all market makers are large institutions.
The keywords being "provides purchase and sale solution". So a better example will be you staying at the same place buying and selling sheep as they come about, specially if there is no one to take up a buyer or seller on their offers or bids.
[1]:http://www.investopedia.com/terms/m/marketmaker.asp http://www.investopedia.com/terms/m/marketmaker.asp
- JumpCrisscross 9y ago> Not really. The word you are looking for...is simply - speculator Market making necessarily involves speculating. They're one and the same. Modern market making has many conventions extraneous to the definition, but there are still markets where market makers only quote one side of the market at a time. For over-the-counter stocks in the United States, you are even allowed to offer soft quotes, i.e. the market maker can renege on a posted quote if they want. The sheep example is resolutely a market maker. Just in an illiquid market. Source: I used to be a designated market maker.