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No, they do it because they know the flow from Robin Hood isn't toxic. It's not about them losing money (market makers hold flat positions, they don't care what
by bidirectional 4y ago
No, they do it because they know the flow from Robin Hood isn't toxic. It's not about them losing money (market makers hold flat positions, they don't care what happens beyond the immediate future) but about them not being more informed about immediate market moves.
If an asset manager wants to buy treasuries for hedging purposes, or an ETF manager wants to buy equities to rebalance, they are also uninformed from the perspective of a market maker.
- colinmhayes 4y ago> market makers hold flat positions They certainly try to, but they do experience some delta in the short run. They are definitely scared of wild swings that happen between them filling an order and flattening their delta.