5 ms·
This does not make sense to me. If bridging the "time divide" is a profitable business, why is it not done by normal market participants? Instead of becoming
by TekMol 5y ago
This does not make sense to me.
If bridging the "time divide" is a profitable business, why is it not done by normal market participants?
Instead of becoming a "market maker", why don't these players just go on the open market, buy shares and hold them until "demand surfaces" and sell them?
The business model which a16z describes seems no different from what every investor does. Except that the "market makers" get an unfair advantage. I doubt that this is for the better of the market. It seems like the only difference it makes to an open market is that some money is sucked out by these players because they get leverage over the other market participants.
- nly 5y agoInvestment: Buying a car because it'll help you reach a higher paying job further away. Speculation: Buying a limited edition or already antique car, and never using it, because you believe someone else in the long future will want it more because its rare. Trading: Buying a car today to sell in the next weeks because you have better information/trading connections/higher volume than the original seller and can source a better price, or you have the distribution channels to move it cheaply and take advantage of smaller profit margins in other areas.