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A comment on Buffett wins $1M decade-old bet that the S&P500 would outperform hedgefunds. Parent comment

Re:Buffett wins $1M decade-old bet that the S&P500 would out... by cm2187 on Sunday September 17, 2017 @02:12PM (#15270881)
You have market makers where you don't have an exchange, or where there is very little liquidity. Usually a bank but not always. They are there to "make a market", i.e. to offer liquidity to clients. Speculators take a directional position. Market makers make money on the bid/offer.
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Re:Buffett wins $1M decade-old bet that the S&P500 would out... by ycombobreaker on Sunday September 17, 2017 @04:31PM (#15271542)
The exchange is not a counterparty. You have market makers there as well. Even in very liquid markets, it may be common to trade against market makers, just at a tighter bid-ask spread.
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