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With the way nasdaq stocks move now, 5 or 10 points a day sometimes, this
sounds like a sure path to ruin. Marketmakers don't really make their money
this way any more. They make it by manipulating prices, trading against block
customer orders, and generally out-trading the public.
In a message dated 6/21/01 2:36:25 AM Pacific Daylight Time,
r-hodge@xxxxxxxxxxxxxxx writes:
> Hi,
>
> Interested to know if anyone on the list uses a classical "marketmaker"
type
> strategy in their electronic trading...ie, bid/offer whatever distance
> apart. When bid is hit you move back predetermined amount to bid/offer at
> new levels until you either get too long or your position is closed by
> someone lifting your offer..at which point you reset and go again.
>
> If so what have you found to be the key determinant to your success/failure
> apart from (low) commissions...?
>
> Thanks,
>
> Robert
>
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