4 ms·
When you make markets you are literally paid the spread to assume the risk of holding the position.
by siftrics 3y ago
When you make markets you are literally paid the spread to assume the risk of holding the position.
- piyh 3y agoCan you break this down a bit more? I've heard about making markets in relation to FTX but didn't really get the full picture.
- siftrics 3y agoYou can Google it or ask an LLM. It's not magic. This is common knowledge.
- UncleMeat 3y agoOkay. That's largely independent of the maximum damage caused by a bug.
- siftrics 3y agoNo. In this case KCG was doing the opposite of making markets --- they were taking --- they were eating the spread over and over and over again until they ran out of money.