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> I've wondered about this. Specifically, how can you make a market in a product that has high violatility and fairly low trading frequency? A large spread.
by Blackthorn 9y ago
> I've wondered about this. Specifically, how can you make a market in a product that has high violatility and fairly low trading frequency?
A large spread.
- ethbro 9y agoHmm. So are market makers only ever effecting instantaneous matches? I was under the impression they often held some portion of the asset between buy-sell or sell-buy in order to increase liquidity. (Which would explain why they like HFT, as anything that boosts trade frequency would decrease their exposure)
- Blackthorn 9y agoThey do hold underlying and have to hedge their risk in various ways. A large spread helps a lot.