Yes I mean if I think the fair price of a stock is $100, and I knew who I was trading with, I might bid 99.99 offer 100.01 to a retail trader, but bid 99.95 off

Yes I mean if I think the fair price of a stock is $100, and I knew who I was trading with, I might bid 99.99 offer 100.01 to a retail trader, but bid 99.95 offer 100.05 to a bank or hedge fund. The retail trader probably doesn't have short-term info and he's not going to keep trading in the same direction so I don't need to make as much spread. On exchange markets you can't really tell who you trade with so you have to guess.