
The Difference Between Price Makers and Market Makers – Greenwich Associates Blog
April 7, 2016 \
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Full Article: Greenwich Associates
Market makers either continuously provide two sided quotes or are willing to do so at any time on demand. They do this to make money by facilitating the trades of other via spread capture. A buy side price maker does not continuously provide quotes and makes money generating investment returns for their clients.
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6 Comments on "The Difference Between Price Makers and Market Makers – Greenwich Associates Blog"
This is a sound well researched article. Marking-making is akin to insurance. If premiums are paid the donwsides will be covered when it goes wrong. If you skimp on the premiums you’ll have nothing to run when the house burns down. Of course, if you have enough capital, you can be an insurer yourself but you unlikely to be very good at it.
Today, the market isn’t paying the premiums. The dealers aren’t being remunerated to provide constant liquidity. Do-it-yourself or all-to-all will never be as good as the specialists.
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