#MarketMakers 

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The market makers, aka the Big Guys, control and manipulate the markets. 

Market makers are individuals or firms that provide liquidity to financial markets by quoting both a buy and a sell price for a tradable asset. 

They aim to make a profit from the bid-ask spread, which is the difference between the prices at which they are willing to buy and sell the asset.

Here's how market makers work:

Quoting two-sided markets

Market makers actively display buy and sell quotations for a guaranteed number of shares, providing liquidity and depth to the market. 

They offer a "two-way quote," meaning they are willing to both buy and sell a security at a competitive price. 

Profit from bid-ask spread

Market makers make money by capturing the difference between the bid and ask prices, which is known as the bid-ask spread. 

They may also engage in principal trades, which involve trading for their own accounts. 

Ensure market liquidity

Without market makers, buyers and sellers would have to wait for a counterparty to match their orders, potentially leading to delays and lower liquidity in the market. 

Market makers play a crucial role in enabling the smooth operation of financial markets and facilitating trading activity. 

Types of market makers

Market makers can be brokerage houses, banks, or individual traders. Some market makers are designated by exchanges, such as the New York Stock Exchange, while others operate as unofficial market makers. 

Risks and rewards

Market makers assume some risk by taking a short or long position for a time, which can result in a small profit or loss. They are compensated for this risk by the bid-ask spread and the opportunity to make profitable trades for their own accounts.