Market Maker Reductionthis morning21 Nov 2023 08:41
"However, there has been a reduction in market makers in recent years1. One of the reasons for this is the decline in dealers’ risk tolerance, which has led to a reassessment of their risk management frameworks and a more granular assessment of the value of trades1. This has driven up the cost of taking risk, making it less profitable for market makers to operate1. As a result, market makers are increasingly being replaced by market making algorithms2. These algorithms use mathematical models to provide liquidity to the market and are often more efficient than human market makers."