Explain the mechanism. If I opened on one market maker, how can I now close on another market maker? - page 9
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Peter, I'm sorry, but our discussion has reached a dead end, because you lack a bit of knowledge about the organization of the exchange and the market. Seriously, I do not want to offend you, but first read the works of Tvardovsky, who explains much of what you're wrong about, and then we'll talk. I've said it all!!!!!
Especially "Can move the market in either direction" is funny :-)
Explain the mechanism, how is it possible tobe a common counterparty (trade both ways), +responsible for volatility and not move the price? How is that possible?
Explain the mechanism, how is it possible to be a common counterparty (trade both ways), be responsible for volatility and not move the price? How is that possible?
Here is a counter question for you. Does a limit order move the price?
Here's a counter question for you. Does a limit bid move the price?
Only in a passive way. That is, if there is an opposing market bid.
Only in a passive way. That is, if there is an opposing market bid.
Limit bids create liquidity and market bids take it away. So the market maker works with limit bids and never with market bids.
The market maker's work can be seen on some low liquid instrument. This will usually be large limit orders, both buying and selling.Explain the mechanism, how is it possible to be a common counterparty (trade both ways), + responsible for volatility and not move the price? How is this possible?
First of all, who told you that there is only one market. Even on Moex there's more than one market. That's one. And two, I don't even want to answer. Learn the basics.
You said yourself about a common counterparty. And in principle it doesn't matter how many there are. They can work as one.
If marketplaces multiplied from the natural expansion of the market, there would be no problem with volatility. And there would be no need for MM. In a market of strong and wealthy traders, no one needs MM leverage.
The sluggish, dying market needs someone who raises the volatility, gives leverage and stimulates the players in every way. Only, he can't remain indifferent and not make a profit from it.
Limit orders create liquidity and market orders take it away. So the market maker works with limit bids and never with market bids.
The work of the market maker can be seen on some low liquid instrument. It will usually be large limit orders both to buy and to sell.If the market is low liquid and MM's limit bids are obviously huge, who moves the market? A rhetorical question.
There are few traders, MM is tapping limit volumes, and who is overcoming them? Without absorption of the limit orders the price will not move. Who will absorb them, if the market without MM is weak and unvolatile?
This is a logical inconsistency.
If the market is low liquid and the MM's limit orders are clearly huge, who is moving the market? A rhetorical question.
There are few traders, the MM is tapping limit volumes, and who is overcoming them? Without absorption of the limit orders the price will not move. Who will absorb them, if the market without MM is weak and unvolatile?
Logical inconsistency.
MM has removed the limit and all the way is clear and the market doesn't have to absorb MM's bid. I'm telling you look in real time at the low-liquid instrument stack (it's easier to find MM bids on it). Observe it in real time. If there was no market maker any sneeze would take the quote to the sky or bring it down to the floor.
MM has removed the limit and the way is clear and the market does not have to absorb MM's bid. I'm telling you look at the low liquid instrument stack in real time. If there was no market maker, any sneeze would take the quote to the sky or bring it down to the floor.
Cut the limit???
You want to put a 1000 limits and the price stagnated, and you want to remove them and the price jumps to the sky?))) Does that mean "don't interfere"??)))
If there was no MM, the market would be self-regulating and live on until it died. Markets should not only live but die as well.
ZS. I've been staring into the glass on a low-liquid instrument for a long time and I know very well the dynamics there. MM bids are jumping around like that and traders don't have a chance to absorb their volume. Therefore, they definitely do not move the price. So - only he does that.
Stop! You removed the limit???
You put 1,000 limits and the price stagnates, and you remove them and the price jumps skyward?))) Does that mean "don't interfere"?)))
If there was no MM, the market would be self-regulating and live on until it died. Markets not only have to live, they also have to die.
:)
How do you imagine the death of the market?