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Market making is a business that avoids taking sides over long time horizons. In this business, they need to be hedged in some way almost all the time, so what
by dchftcs 5y ago
Market making is a business that avoids taking sides over long time horizons. In this business, they need to be hedged in some way almost all the time, so what you said makes no sense.
- FabHK 5y agoThough, yes, if uncertainty rises, market makers will quote wider spreads, which results in huge implied vols when you try to buy options (particularly not at the money).