Isn't the cost of liquidity its only reasonable metric? Anyone can be "liquid" if they're willing to take a sufficient hit on prices. In that sense, "just makes liquidity cheaper" is like saying "just makes more liquidity".
Actually having two (or more) market makers benefits the market. Because a single market maker can pause or quit at any moment in time.
Re:What Business is Wall Street In?
by lifeisstillgood on Saturday September 22, 2012 @07:03AM
(#4557606)
That's the same thing ... An extra Market maker provides no benefit apart from being able to easily prevent there being no Market maker
Anyway makers have specialisms and get advantages from the exchange - they are not supposed to just bugger off home cos it's Tuesday
That's not true. An extra market maker provides the benefit of competing market makers, which should reduce the spread.
Most markets are not specialist markets. Specialists at the NYSE were accused of skimming hundreds of millions of dollars from customers. They're an anachronism and a much more disquieting idea than robots competing to provide the best price --- which is pretty much what most HFT systems do.
But. That's the thing. They CAN 'bugger off' home at any time. And often do.
If a particular market maker can't work for some reason with some particular symbol [there are thousands of symbols], at some particular time, he would just pause. And they often do.
in the comics, when Superman is protecting Metropolis and Supergirl turns up, she cannot do anything the Man of Steel could not do - she just looks better in tight blue Lycra.
Kudos for your recipie.
Edit removed my dumb, knee jerk, unappetising broccolli recipie/comment on state of English cooking in my childhood. Nevermind.