Market maker

dmasterdc

Newbie
5 0
I'm relatively new to this site and am constantly learning new ground. I've just graduated and have an interview shortly for a market maker position at a large London bank - can anyone provide me with details as to their activities and websites where I can learn more about the position.

Many thanks. :cool:
 

tjbw

Member
51 1
There's loads of information out there about investing, trading etc, but I'd not come across much on market making.

However a google search on exact phrase 'market maker' throws up lots of links.

This is from one:

Market maker firms like Merrill Lynch - MLCO, Soloman Smith Barney - SALB, Goldman Sachs - GSCO, Herzog - HRZG, Troster Singer - TSCO, and Nite Securities - NITE, just to name a few of the hundreds of active market markers, as mentioned earlier, are notorious at playing games. They perform "Head Fakes", Shake outs, Fading, and all in all, just cause general chaos when they choose to, which seems to be just about most of the time. Many traders and their trading accounts have succumb to the antics of these firms. As a day trader, keep one thing in mind. Day trading is war. It is a never ending battle against some of the biggest trading houses in the world.

I want to reiterate that market makers want your money, and will stop at nothing. The will do whatever it takes to influence you into making buy and sell decisions. Your number one best advantage is to learn and understand the movements of the market makers, so that at least you will have a basic fighting chance to maneuver your way through the never ending maze of volatility created by their actions.

Level II is purely suppy and demand based. You have buyers and sellers. The market maker's job is to simply fill customer's orders, and make profit for their firm. Once you learn and understand how market makers work, and how they think, your will have a greater opportunity to capitalize on their movements. One of the important things to remember is to try to think like a market maker. Then when you can do that, then you will understand a concept I refer to as "Painting" the market maker. To "paint" the market maker is to capitalize on his actions, or rather, do as the market maker does, by copying his actions. To do this, you must first learn and recognize his intentions.

Barry
 

dmasterdc

Newbie
5 0
Hello Barry,

thanks for the reply. I'm still gathering as much info as possible, although haven't really come across a search engine that has a detailed explanation of a market maker - looked at LIFFE, CBOT, LME, Goldman sachs, Merril Lynch, Goldman sachs and LSE just to name a few sites ; but no detailed explanations.

My main problem is that as I'm a recent graduate I've only had commercial banking experience during university breaks.

Would appreciate further comments.
 

neil

Legendary member
5,167 747
MM's

Why not go to the LIFFE site and then ring someone (or email) there for more info.

I am sure they would be pleased to help.

Good luck
 

roohif

Junior member
34 1
Yeah I know this is a really old thread, but I haven't of any of these games you say that market makers play - and trust me, I've got plenty of experience.

Derivatives Market Makers are there to provide liquidity to the market by continuously providing bids and offers in the options. We make our money by trying to buy at the bid, and sell at the offer. Market making is highly competitive between firms, which naturally stops us from being greedy - if the bid offer spread is too wide, someone else can come in and make a tighter one. Believe it or not, the winner here is you, the retail investor: you get a tight, liquid market to trade on, and we as market makers take the opposing risk of your trade and have to work hard to unwind it.

It's a tough job, but those who do it well, do so profitably.

Can you elaborate more on what these games are?

There's loads of information out there about investing, trading etc, but I'd not come across much on market making.

However a google search on exact phrase 'market maker' throws up lots of links.

This is from one:

Market maker firms like Merrill Lynch - MLCO, Soloman Smith Barney - SALB, Goldman Sachs - GSCO, Herzog - HRZG, Troster Singer - TSCO, and Nite Securities - NITE, just to name a few of the hundreds of active market markers, as mentioned earlier, are notorious at playing games. They perform "Head Fakes", Shake outs, Fading, and all in all, just cause general chaos when they choose to, which seems to be just about most of the time. Many traders and their trading accounts have succumb to the antics of these firms. As a day trader, keep one thing in mind. Day trading is war. It is a never ending battle against some of the biggest trading houses in the world.

I want to reiterate that market makers want your money, and will stop at nothing. The will do whatever it takes to influence you into making buy and sell decisions. Your number one best advantage is to learn and understand the movements of the market makers, so that at least you will have a basic fighting chance to maneuver your way through the never ending maze of volatility created by their actions.

Level II is purely suppy and demand based. You have buyers and sellers. The market maker's job is to simply fill customer's orders, and make profit for their firm. Once you learn and understand how market makers work, and how they think, your will have a greater opportunity to capitalize on their movements. One of the important things to remember is to try to think like a market maker. Then when you can do that, then you will understand a concept I refer to as "Painting" the market maker. To "paint" the market maker is to capitalize on his actions, or rather, do as the market maker does, by copying his actions. To do this, you must first learn and recognize his intentions.

Barry
 

wackypete2

Legendary member
10,229 2,053
Who dusted off this old thread? The OP hasn't been around in 8 years. geez...

Peter
 
 
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