market making business

[spenserzhou]

Hi ALL -
does anyone have an idea, what challenge the option market making business will face in the next 12 month?

I am seriously considering to enter into the area.

Thanks in advance!

 

[arabianights]

no problems at all mate, market making options is easy, anyone can do it with no knowledge at all, why not start tomorrow? just dime everyone, you're guaranteed to make money

 

[spenserzhou]

I heard that they want to impose regulation issue on high frequency trading. I don't know market making will also be a victim of that. Will market making be subject of regulation as well?

Besides, that is a question they want me to fill out in application questionaire. I am not sure how to answer to that. So your help is very valuable to me

 

[scose-no-doubt]

Speaking from personal experience, sending that application in will likely do your chances more harm than good. You should go away and study and then apply next year/next opportunity when you are ready to answer those type of questions. You are wasting your time and are going to get yourself blacklisted.

 

[spenserzhou]

Hi, thanks for your advice.
Actually I had some points, however wish to check out what the other guys thinking about it. It is quite a good question, isn't it.

I would say three points
1) regulation, which makes the maket maker to hedge more expensively, e.g. forbidden of short selling in some european countries
2) there will be more flow trades in the future because of the financial crisis. Hence the trading platform, its reliability and capacity needs to be enhanced.
3) Market making companies need more unique trading strategy to compete in a growing market, as there are more and more competition.

Hope it makes sense.

 

[Johnkarner]

Its daily volume is about 3 percent of the average daily trading activity in London, New York, Hong Kong and San Francisco. In addition, the company Citadel securities firms to execute and route more than 30 percent of the average U.S. equity volume options trading and contained more than 8 percent of the average of the NASDAQ and NYSE share volume.