"I Am A Market Maker"--The Quote

I would like to thank all those who have posted above in response to the first comment. I am an ex-MM and yes I was put out of business by a computer, but how dare you say I know nothing of risk! I think anyone who worked the markets in the over 200 year history of open outcry might have a problem with this gentleman. When is the last time he had a half million share position for which he was personally responsible? I am not saying MMs invented the wheel, but respect those in every aspect of the business.

 

I did not mean to say that MM did not, and do not make a valuable contribution to the system. To the contrary they did, and still do. What I meant is to address those MMs who make the quote I put in the title to impress retail traders (And they have done it. Check the forums and you will read for yourself). Retail traders do not make money primarily from bid-ask, and their leverage margin is different, their context is different. Retail traders do not have the advantage of seeing the two sides of market, exploit bid-ask, etc. So MMs in my view is somewhat easier in those respects. So MMS should not come on a forum, put that quote as if they always know better than the retail trader on matters of trading knowledge. They themselves have to learn and adapt before helping others, and may in fact learn from retail traders. They seem to start from the assumption that there is nothing to learn from retail traders, and whatever the retail trader says, it is inferior to the word of a market maker.

But frankly sir, if some were really good at risk management, how come some did not manage the risk that the future of their chosen profession had (which is being replaced by a computer).

 

Riskfree, lets get to the gravy man, what are you selling? or about to be selling?

 

You can make any inference about me you like, it makes no difference to me. You can continue to ride your high horsy and take back handed jabs at me and others all you like, while pretending you’re not here for the purposes of insulting people and stroking your own ego. Again, since you don’t know me personally and you’re just another figure in the vast anonymity of the internet it means nothing to me.

You may speculate about what I do or do not know and conclude what I do or do not understand, that only serves one purpose, to stroke your own ego.

You many also pretend or believe I have “sayings” about risk and reward, you simply don’t know what my belief on risk vs. reward is so you’ve posted things I did not say and then proceeded to shred them, once again to feed your own ego.

Go right ahead and continue to stroke your own ego on an anonymous internet board if it makes you feel better about yourself. Go ahead and speculate on what I know and say and believe if it makes you feel better about yourself. It has no effect other then to entertain me.

Have a wonderful day,

Jim

 

Retail traders also get to tell MMs which options to trade long or short. If you make a living from other people telling you what to trade, you're one heck of a risk manager.

Wow. Nice non sequitur.

It's a valid point, though. They should have planned ahead and been faster and cheaper than computers at processing orders and calculating dispersion matrices. That would have been the smart thing to do.

Now, where's the eye-rolling smiley on this thing?

 

This guy clearly knows all about options market making-
"They know something about risk, as otherwise why did they live only on bid-ask spreads."

Your the guy we used to pay to trade with..........

I'm also a former MM.........

 

Non sequitur? A joke. In plain english for you: if a MM didnot forsee his replacement by a computer and adjust his career or position within the firm before the fatal moment, how could one such MM be top notch in managing risk in trading? Your comment lead me to conclude that you understoodd that the only way a MM could have done it is by fighting computers (see the words cheaper, faster, etc, above). That is another point of failure in risk management. No real risk manager spend his time trying to improve a position that is doomed to fail, and is getting worse. Get out ASAP is the answer in such cases. Yet your attitute is to fight computers (in trading it translates to fight the trend). Smart MMs have understood the shift and/or forsaw it. Those are real risk managers. They showed it in managing their own careers. Trading is just an example where risk has to be managed. "Once a good risk manager, always...

 

Are you starting to see why, yet?

 

Commie it would appear that your witt and sarcasm went un-noticed by riskfree who, shockingly, was all consumed in trying to take a jab at you while stroking his ego yet again.

It, on the other hand, did not go un-noticed and thanks for the chuckle!


You are a master wordsmith and your wit, humor and sarcasm is always appreciated.

 

To borrow a phrase from Rowan Atkinson, riskfree wouldn't get it if it came in a large bag marked "IT".

I'm not even sure what this particular ego trip is all about. It sounds like "look at me, I've never been a market maker".

Glad I could brighten your day a bit with some internets sarcasm.