Poddy T13 Jan 2012 12:42
With thin trading the MMs have to create a trading margin , e.g If Ford sells Ford Fiestas for 10K and makes 2K per car and sells say 500000 a year, they can offer discounts due to the volume of sales. But Rolls Royce would probably sell about 3000 per year but with a 20K profit per car. So the bigger the turnover (volume) of shares the spread narrows to encourage more buying and selling. Also the MMs use a wide spread to get shares cheap when they know there is future potential in a share, hopefully like this one.GL