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It seems to me that the opportunities you are describing will be rare. If we classify liquidity providers into static and dynamic, under an efficient market it
by qqii 6y ago
It seems to me that the opportunities you are describing will be rare. If we classify liquidity providers into static and dynamic, under an efficient market it should be expected that the static liquidity providers will over time distribute their funds efficiently along the curve. The event you describe will only occur if volatility is greater than expected and the dynamic liquidity provider has a large share.