RE: As I posted yesterday…. Christmas 202525 Apr 2025 09:13
Multiplier - thats not how market making works at all - you dont understand it. The MM dont just sell millions of shares at their shrt book risk then pull the price back and cover to make an easy £10m. They simply take the order flow and match up against that, they are not allowed to run a huge book risk position, in fact they would get fired if they did. When the bid is strong they raise prices to find stock, when the flow slows of the offer is strong they then drop prices because the dealers are placing shares. I was a dealer in the CIty - a long time ago when we used phones and spoke to people to place trades and negotiate prices with the MM - its not gambling or big position taking, its simply offering liquidity and getting paid for it. In fact the MM dont give a monkeys if the price rises really - they just want a strong stream of steady orders (flow) to match up buyers and sellers an get paid. If they had 10M sellers and 10M buyers its a perfect day. Thanks Blue