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What? Who told you this? Market makers, especially in crypto, do not have long holding periods. The big moves in crypto are because of coordinated manipulation

What? Who told you this? Market makers, especially in crypto, do not have long holding periods. The big moves in crypto are because of coordinated manipulation to trigger stops and liquidations (forced, price insensitive buying and selling). I don’t know if this is /r/wsb leaking but markets do not tank because market makers pull back…that’s just not the business they are in.

m3kw9 5y ago
Yeah they delta hedge anyways so no need to pull back
- qeternity 5y ago
  On options, yes. But in delta 1 products is not always so easy. They are often legitimately just market making.
quickthrowman 5y ago
If tether crashed I guarantee every MM would pull their bid, nobody wants to be left holding the bag. I don’t care if they’re obligated by contract to provide a bid/ask at all times—if USDT went bust, BTC/USDT liquidity would evaporate very quickly. The contract would be irrelevant since the exchange would die. Either that, or their bid will be 0, like on 0DTE options that are far out of the money.
- qeternity 5y ago
  Yes, I agree. But if all MMs withdrew but you had lots of other stickier liquidity, spreads might widen but it would cause a crash. Of course if Tether implodes, all the long term buyers will evaporate, which is my point: medium/long term price is dictate by swing and positional traders, not market makers. > Either that, or their bid will be 0, like on 0DTE options that are far out of the money. What? This doesn’t make any sense. 0dte options are often some of the most actively traded. But I’m not really sure you get this stuff. Source: career hedge fund options trader
  - quickthrowman 5y ago
    > What? This doesn’t make any sense. 0dte options are often some of the most actively traded. But I’m not really sure you get this stuff. Did you miss the “far out of the money” part of my comment? What’s the bid/ask on the Oct 8 SPX 4550C going to be at open tomorrow, assuming SPX opens around 4400? Bid 0.00, Ask 0.05 I also understand there is resting (and possibly hidden, depending on the order types allowed by the exchange) liquidity on the order book that would be there if USDT collapsed and MMs pulled out, but how long do you think it would take for orders to evaporate for an asset that is rapidly approaching a 0 dollar valuation? I’m just a dumb amateur, but I have a basic grasp of the mechanics.
    - qeternity 5y ago
      > What’s the bid/ask on the Oct 8 SPX 4550C going to be at open tomorrow, assuming SPX opens around 4400? Bid 0.00, Ask 0.05 Minimum price tick == 0.05 on ES options. I would sell you some for 0.01 but Globex won’t let me.
      - quickthrowman 5y ago
        I’m not buying any 4550Cs. You do understand my original comment chain was talking about a complete tether collapse where it has 0 value and not just a temporary dip in price.. right? Go read arcticbull’s comment about 6 levels up, that’s the scenario I was referring to in my comment. I’ve traded both ES and SPX options so you can stop quizzing me about them. By the way, minimum price tick on ES options is .25 (which is $12.50) lmao. If you don’t believe me, look at the option chain, mr career hedge fund options trader guy (your words, not mine).
        qeternity 5y ago
        > You do understand my original comment chain was talking about a complete tether collapse where it has 0 value and not just a temporary dip in price. Ok, and? If USDT is worthless, you expect market makers to continue to be willing to hold it? You seem upset that an MM would wouldn’t bid > 0 for something with ev = 0. I’m not sure what you actually expect here. A Tether collapse is exactly the sort of moments that market makers don’t want to be involved in, because that’s not what market making is. It’s the definition of toxic/informed flow. > By the way, minimum price tick on ES options is .25 (which is $12.50) lmao. Hey genius, that’s only for options where the premium > 5 which in the above case it isn’t. Per the contract spec: > Reduced Tick: > 0.05 index points = $2.50 for premium at or below 5.00 But you wanna take shots at me? Adorable. > I’ve traded both ES and SPX options so you can stop quizzing me about them. Haha man quit larping on HN. Do you mean SP options? Or maybe you mean SPY options. There are no SPX options because it’s an index, not an underlying. > If you don’t believe me, look at the option chain, mr career hedge fund options trader guy (your words, not mine). Hahaha oh man, I’m dying. So much bravado, so little to show for it. It’s weird because someone like yourself who has totally, for sure, traded loads of ES options…would know this from experience.

m3kw9 5y ago

Yeah they delta hedge anyways so no need to pull back

qeternity 5y ago
On options, yes. But in delta 1 products is not always so easy. They are often legitimately just market making.

quickthrowman 5y ago

If tether crashed I guarantee every MM would pull their bid, nobody wants to be left holding the bag. I don’t care if they’re obligated by contract to provide a bid/ask at all times—if USDT went bust, BTC/USDT liquidity would evaporate very quickly. The contract would be irrelevant since the exchange would die. Either that, or their bid will be 0, like on 0DTE options that are far out of the money.

qeternity 5y ago
Yes, I agree. But if all MMs withdrew but you had lots of other stickier liquidity, spreads might widen but it would cause a crash. Of course if Tether implodes, all the long term buyers will evaporate, which is my point: medium/long term price is dictate by swing and positional traders, not market makers. > Either that, or their bid will be 0, like on 0DTE options that are far out of the money. What? This doesn’t make any sense. 0dte options are often some of the most actively traded. But I’m not really sure you get this stuff. Source: career hedge fund options trader
- quickthrowman 5y ago
  > What? This doesn’t make any sense. 0dte options are often some of the most actively traded. But I’m not really sure you get this stuff. Did you miss the “far out of the money” part of my comment? What’s the bid/ask on the Oct 8 SPX 4550C going to be at open tomorrow, assuming SPX opens around 4400? Bid 0.00, Ask 0.05 I also understand there is resting (and possibly hidden, depending on the order types allowed by the exchange) liquidity on the order book that would be there if USDT collapsed and MMs pulled out, but how long do you think it would take for orders to evaporate for an asset that is rapidly approaching a 0 dollar valuation? I’m just a dumb amateur, but I have a basic grasp of the mechanics.
  - qeternity 5y ago
    > What’s the bid/ask on the Oct 8 SPX 4550C going to be at open tomorrow, assuming SPX opens around 4400? Bid 0.00, Ask 0.05 Minimum price tick == 0.05 on ES options. I would sell you some for 0.01 but Globex won’t let me.
    - quickthrowman 5y ago
      I’m not buying any 4550Cs. You do understand my original comment chain was talking about a complete tether collapse where it has 0 value and not just a temporary dip in price.. right? Go read arcticbull’s comment about 6 levels up, that’s the scenario I was referring to in my comment. I’ve traded both ES and SPX options so you can stop quizzing me about them. By the way, minimum price tick on ES options is .25 (which is $12.50) lmao. If you don’t believe me, look at the option chain, mr career hedge fund options trader guy (your words, not mine).
      - qeternity 5y ago
        > You do understand my original comment chain was talking about a complete tether collapse where it has 0 value and not just a temporary dip in price. Ok, and? If USDT is worthless, you expect market makers to continue to be willing to hold it? You seem upset that an MM would wouldn’t bid > 0 for something with ev = 0. I’m not sure what you actually expect here. A Tether collapse is exactly the sort of moments that market makers don’t want to be involved in, because that’s not what market making is. It’s the definition of toxic/informed flow. > By the way, minimum price tick on ES options is .25 (which is $12.50) lmao. Hey genius, that’s only for options where the premium > 5 which in the above case it isn’t. Per the contract spec: > Reduced Tick: > 0.05 index points = $2.50 for premium at or below 5.00 But you wanna take shots at me? Adorable. > I’ve traded both ES and SPX options so you can stop quizzing me about them. Haha man quit larping on HN. Do you mean SP options? Or maybe you mean SPY options. There are no SPX options because it’s an index, not an underlying. > If you don’t believe me, look at the option chain, mr career hedge fund options trader guy (your words, not mine). Hahaha oh man, I’m dying. So much bravado, so little to show for it. It’s weird because someone like yourself who has totally, for sure, traded loads of ES options…would know this from experience.