The Big Boy!

Peedee. A market making firm is registered with the LSE as such. In return for making a 2 way price during the Mandatory quote period, in at least the Normal Minimum size ( NMS) market makers gain certain exemptions. Trust me , you really don't need to know the minutiae of these, but having been a market maker for 18 years, I will fill you in if you really need to know.

Basically after Big Bang, with the introduction of dual capacity the market maker evolved from the old style Jobber. All stocks used to have a market maker, but with the introduction of SETS, that was removed from about 150 odd stocks. There is now a hybrid system called SETSmm which has replaced SEAQ for most of the midcap 250. Marker makers basically provide liquidity where it's needed ( obviously in less liquid stocks) to enable a quote to be narrower than would otherwise be possible. Sorry if this reply is a bit long winded...
 
Peedee,

Adding to CT - MM's exist in every exchange, be it derivatives, stock, etc. They all provide the same function pretty much. On the NYSE, they are known as Specialists, on other exchanges as Operators etc.

MM's are always members (or some category there of) of that exchange in that they buy or lease a 'seat' on the exchange. In simple terms this means they cough up £xxxx,xxxx per year for the right to access the order books directly (not via a broker). This means they pay no commission.
 
Guys

Correct me I`m wrong ( I often am, just ask my wife!) but I was under the impression the Globex exchange , ie the e-minis has no MM`s :?:
 
I'm sure they do.

I was a market maker at LIFFE before that went upstairs (electronic). My old mates are now making markets on the connect platform. NASDAQ is an electronic market. Don't tell me there are no MM's there! Same with LSE... Why would GLOBEX be any different?

As CT stated, the main purpose of a MM is to provide liquidity. A MM firm would be crazy to ignore the ES with its liquidity.
 
BBB - some markets are deemed not to need market makers- for example- SETS , and whilst Goldmans, UBS etc , etc will make a market to their own clients, they are under no obligation to make anyone a market- certainly not a non client ( for example another member firm like IG or D4F would never get a market from one of those houses) whereas on SEAQ the market makers have an obligation to make a 2 way price in at least NMS to other member firms- thus any broker no matter how big nor small will be able to deal in at least the price displayed.

Hope that helps a little...
 
Sure does - thanks. Must admit, my knowledge of LSE is zilch.
 
CT - as you've worked in the City too, why oh why did everyone look down their nose at the pit trader? I couldn't understand it, and just assumed it was jealousy. I admit that some of the off floor behaviour was a bit course - especially in some of the bars on Cannon St, but we weren't all like that - well not always. Maybe thats just London/the City for you???

I hoped you could give your perspective as someone who is familiar with the City but didn't trade at LIFFE
 
BBB spot on mate- Jealousy - there were you guys working when you liked, earning what you could extract from the system, and us desk jockeys were tied to our desks! I think even worse behaviour came from the FX brokers- so don't think it was outrageous behaviour that put people off- just jealousy!
 
Yea- but we're all desk/screen jockeys now! Can't even fix the spreads with my mates! Now I've had to learn to trade! How am I supposed to jump infront of GS using a chart???

hehehehe
 
jpwone said:
Yes they can but in the end the market will always re-balance and win.

Good examples right now are the Japanese and American currency policies.

Japan is dependent upon exports. For Japanese goods to be attractive to importors they must be as cheap as other goods of an equal quality. As America is a large purchaser of Japanese goods then the Yen must not get too far out of step with the Dollar. The Japanese have been regularily selling Yen and buying Dollars to keep the Yen from speeding away from the Dollar. They will chuck a couple of trillion Yen at the market and the effect will last about 12 hours.

America on the other hand has a weak Dollar policy. This is to support the export of American goods and keep Americans employed. As the majority of the worlds trade is conducted in US Dollars they can simply print as many as they want and spend them with other countries. This policy is starting to have a very serious effect in Europe where car and software producers are finding it increasingly difficult to sell into the States and could be delaying the return from recession in France and Germany. So, the American policy is certainly affecting the markets.

The bit that the US seems to have missed is that by advancing the state of the US economy at the expense of its primary trading partners it is in danger of biting the hand that feeds it. If Europe cannot sell into the States then there is a real possibility that by the time the US relaxes it policy that the damage to Europe will have been sufficient to delay Europes ability to trade with the US. In effect the US could make the best and cheapest widgets in the world but if the world cannot afford them (regardless of price) then America will not sell them and the market will find a painful balance and win again.

So, yes, a country can manipulate the markets but only to a point. In the end it will catch them up and bite them in the .....
Click to expand...


Is the stock market running on fumes? ;)

http://stockcharts.com/h-sc/ui?s=$WTIC:$SPX&p=W&st=2000-05-19&en=(today)&id=p36547486056
 
Triangle breakout to the upside?

http://stockcharts.com/h-sc/ui?s=$WTIC&p=W&yr=1&mn=6&dy=0&id=p56080611631
 
kalott said:
Is the stock market running on fumes? ;)

http://stockcharts.com/h-sc/ui?s=$WTIC:$SPX&p=W&st=2000-05-19&en=(today)&id=p36547486056
Click to expand...


:sleep: :sleep:
 

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peedee said:
Is there any particular country, company etc, who can manipulate the markets to a high degree, or is that rubbish!
Click to expand...

International funds typically have the most influence on macro economics I would imagine. I.E. what's going on inside London.

Aside from that the FED reserve probably has the most clout.

Big money has a veil of privacy though considering funds are stashed in the crowns low-tax to no-tax tax havens, good luck finding out what they're doing before they make the market move. That information is not privy to the public as far as I know. These funds are protected legally so I don't see where you would get static data on it as you can with American finance.
 
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