5 ms·
They are just making markets, so it's sort of 1 and 2. I say sort of because it means clients want to trade cryptocurrencies. They aren't necessarily high net w
by workthrowaway27 9y ago
They are just making markets, so it's sort of 1 and 2. I say sort of because it means clients want to trade cryptocurrencies. They aren't necessarily high net worth individuals though. My guess is most clients are institutional, though it might be different with people wanting to trade cryptocurrencies. It's FOMO if you think not wanting to lose money to your competitors is FOMO. I'd say it's more just performing one of their job functions.
I doubt they care about being criticized and until GS releases Goldman Coin I doubt they're trying to get a share price bump from this.
- twic 9y agoIt's not entirely clear to me whether "making markets" means on exchanges, or over the counter. The term normally means on an exchange; over the counter, you're a dealer rather than a market maker. If it's on exchanges, then it has nothing to do with high net worth clients, or any other kind of client, because they won't be trading with their clients specifically, they'll be trading with other market participants. if it's OTC, then it could be part of a package of services for clients. That would still a bit weird, though, because a bank would normally act as a broker rather than a dealer for its clients - going to the market and finding them the best price, rather than making its own price. I think that their reason is much simpler: they think they can make money doing it. I guess you could call that FOMO. But basically, they think that with their trading instincts, technology, and famously huge brains, they can move their prices around so that they can buy low and sell high without getting, as we say in the trade, their faces ripped off.
- kgwgk 9y agoDealers act as market makers quoting bid and ask prices, don’t they?
- twic 9y agoIt's fundamentally the same thing, yes - showing bid and offer prices at which you will get into risk on your own account. But the term "market maker", in my limited experience, usually means on an exchange, whereas it's "dealer" over the counter. For example, you have swap dealers, but futures market makers.
- qaq 9y ago"They are just making markets" are you seriously implying GS and JPM are just making markets :)?
- workthrowaway27 9y agoGiven that prop trading has been severely curtailed at investment banks, yes.