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If a bunch of options traders provide liquidity services which the market values at $1m, the market will pay the options traders $1m. If the options traders de
by jameshart 6y ago
If a bunch of options traders provide liquidity services which the market values at $1m, the market will pay the options traders $1m.
If the options traders decide to armwrestle to decide which of them gets to keep the $1m, the market doesn’t care.
- koheripbal 6y agoIf there are only two traders trading against one another, you are correct. ...but there is an ecosystem of traders intertwined and many of them are primary market participants, so the market does care, because the "gamblers" are providing liquidity to the legitimate participants.