making market

Discussion in 'Strategy Development' started by jb514, Oct 2, 2012.

  1. jb514


    Any of you guys make market by hand on the larger spread equities? It seems like it could be profitable but I haven't really heard anyone talk about it.
  2. jb514


    Yeah all the other orders are definitely automated. It kinda seems like they are just flipping from the bid to the offer not taking any inventory.

  3. ie day trading
  4. 2rosy


    you're going to sit there all day manually making a market? you must put very little value in you're time
  5. jb514


    inventory as in trading high volume but never taking on any significant amount of shares
  6. On a good day :p
  7. iggy9807


    If you do it manually, I recommend finding a few micro-caps that look "solid" to reduce the risk of a big loss. Basically, find something you wouldn't mind investing it and trade around your position without going short.

    I trade about 500 low-volume stocks but I upload my limit orders overnight so I am not a "real" market maker. If you get stuck with a position in a thinly-traded stock, it's really hard to get out - the spreads can be as wide as 10-20% so be prepared for occasional big losses and limit your positions. Of course, the wide spreads is why it's "easy" to make decent profits (with a smallish account).
  8. jb514


    Almost everything I do is automated, so by no means am I set on trading by hand
  9. bone

    bone ET Sponsor

    Be very, very careful with automation in thin names. And in the overnight and late afternoon markets. Most of the really painful automation errors that I have heard about locally here in Chicago typically are in thin, wide, gappy markets.
    #10     Oct 25, 2012