Re:Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk
by kgwgk on Thursday December 21, 2017 @06:31PM
(#15983918)
Dealers act as market makers quoting bid and ask prices, don’t they?
Re:Goldman Sachs Is Setting Up a Cryptocurrency Trading Desk
by twic on Friday December 22, 2017 @07:16AM
(#15986912)
It's fundamentally the same thing, yes - showing bid and offer prices at which you will get into risk on your own account. But the term "market maker", in my limited experience, usually means on an exchange, whereas it's "dealer" over the counter. For example, you have swap dealers, but futures market makers.
If it's on exchanges, then it has nothing to do with high net worth clients, or any other kind of client, because they won't be trading with their clients specifically, they'll be trading with other market participants.
if it's OTC, then it could be part of a package of services for clients. That would still a bit weird, though, because a bank would normally act as a broker rather than a dealer for its clients - going to the market and finding them the best price, rather than making its own price.
I think that their reason is much simpler: they think they can make money doing it. I guess you could call that FOMO. But basically, they think that with their trading instincts, technology, and famously huge brains, they can move their prices around so that they can buy low and sell high without getting, as we say in the trade, their faces ripped off.