Market makers are not supposed to take sides, such minimal risk. They make money by charging the bud ask spread. With minimal risk, they are also not supposed to go bankrupt or make huge sums of money.
Yes "they" do that. No it is not manipulation. It is providing liquidity, nothing more. No gun to anyone's head.
I'm not going to watch this stupid sht. 1. Market makers get picked off all the time. I have endless personal anecdotes. 2. When was the last time you filled a limit order and told yourself that the trade was a loser due to the MMer?
Who is foolish enough to spend 2 hours watching these 2 episodes? At least you should provide the summary. Market makers must work smartly so that they can bring home the bacon everyday. Similarly, retail traders must trade smartly so that they can bring home the bacon every day. Is there any video on CONFESSIONS OF A RETAIL TRADER?
An MM or any exchange member would need to be employed by a BD. No compliance officer would also them to post up on YT. These are bullshit.
Well isn't this good? I mean those buy orders are very likely buy limit orders to buy only at a certain price level and below. If they don't drive the price lower, how are those buy orders going to be filled? For example, if the price of XYZ is at $58 and the large buy limit orders are all at $55, these limit orders won't get filled and the price is not going to drop by themselves. The only way that the price is going to drop from $58 to $55 is if there is massive selling at $58 and then at $57 and so on until the price drops to $55 and which indicates the sellers are willing to sell XYZ at $55 now that's when the buy limit orders are going to be filled at $55. And the same thing hapen for sell orders. This is what I think how it happens as I have seen this a lot in my trading that the price gets moved just to take out my order and then the price goes right back up or down. Yes I can understand if you are looking to short or stop-loss on an existing buy order then yeah you will be pissed that the price gets moved down not allowing you to sell at the price you want but that's how the MM work. They move orders and at the same time make a profit. They are NOT a charity. They ARE profit-seeking as that's their primary goal in being the market maker in the first place. My problem is not with them moving prices to work the orders but their lack of transparency and their unfair advantage of being able to know our positions via PFOF. Trading is a very competitive business that anchors on information; whoever has better and more information wins. It's fine that we "do battles" against the MM with them trading against them but it's not fine that they have more information about us than us about them setting us up to fail before we even started. It's like we are competing in a race and MM is allowed to start first.
Look at it this way. The MM has to provide liquidity and needs to be compensated for risking capital, so it’s all good, it is what it is. MMs commit most of their capital and make the most profit on big caps during the first hour, and because they’re creatures of habit, and in addition the institutions are always very aware of their VWAP, so when you combine these things plus how the media hypes the news and how the retail order flow overreacts to it, then you can start building strategies around their behaviour and align yourself with them instead of fighting them. Thanks to the MMs, the first hour contra-moves are very profitable.