Re:Behind the Market Swoon: The Herdlike Behavior of Compute...
by ctlby on Friday December 28, 2018 @07:38PM
(#18780756)
> There is no magical equilibrium
Your understanding is exactly backwards. Market makers provide the "magical equilibrium" by bridging supply and demand across time.
> and if there was, there would be no profit.
Wrong again. Even with infinite shares on the bid/ask, there's still a spread for market makers to collect.
More generally, what exactly do you think your comment proves? If a retail investor buys the sole 100 shares at top-of-book, the price (mid) moves up, but there's one buyer and one seller. Where's the "delta"? And if a big hedge fund buys 100,000 shares from 10 market makers... 100,000 shares demanded and 100,000 shares supplied. Magic!
You're arguing against an accounting identity. I know what you're trying to say: what moves prices is relative eagerness of buyers and sellers. You're just too inexperienced to be able to explain it.
Your understanding is exactly backwards. Market makers provide the "magical equilibrium" by bridging supply and demand across time.
> and if there was, there would be no profit.
Wrong again. Even with infinite shares on the bid/ask, there's still a spread for market makers to collect.
More generally, what exactly do you think your comment proves? If a retail investor buys the sole 100 shares at top-of-book, the price (mid) moves up, but there's one buyer and one seller. Where's the "delta"? And if a big hedge fund buys 100,000 shares from 10 market makers... 100,000 shares demanded and 100,000 shares supplied. Magic!
You're arguing against an accounting identity. I know what you're trying to say: what moves prices is relative eagerness of buyers and sellers. You're just too inexperienced to be able to explain it.