The Market Maker Part 1
Spencer Crooks, ex Director of Market Making at Winterfloods, talks to Tamzin Freeman, piworld, about Market Making. What they do, risk management, setting a price and the spread, and much more.
https://www.piworld.co.uk/2019...
The Market Maker Part 2
Gives more insights into how market makers set the price. We learn a little more about dark pools, tree shakes and much more. And yes, market makers can and do get it wrong!
An active private investor in small caps: growth/value. Co-Founder of piworld.co.uk which provides videos of company presentations, management interviews, investor interviews & webinars, to enable investors to make informed decisions.
Thanks Tamzin. I really enjoyed. Hopefully it helps to understand a bit more how it all works.
Both videos are a fascinating insight to the role of market makers in maintaining liquidity.
In relation to small caps, the videos blow a massive hole in the Efficient Market Hypothesis, where a share price reflects all available information and consistent out performance is therefore impossible.
Instead small cap prices are the result of recent news, buys/sells and the insight and intuition of a handful of market making traders whose objective is to encourage us to trade more. This inside track strengthens my view about buying high quality/positive momentum small cap companies, ignoring the frequent price fluctuations and to holding them until their story/metics change for the worse.
Tks Tz
A lot of nuggets, especially in Part II. For a market maker to say 'one gets it wrong every day' and repeat the mantra 'No-one gets in at the bottom or out at the top' renews my faith in my trading.
He also said much about staying with the companies that meet one's fundamental criteria, even telling us some of his own criteria. Find the excellent companies and 'sit on your hands' referring to Buffet saying the market is only where one enters or exits.
So many interesting angles and you showed us your own understanding too. His 'does that make sense?' after several explanations shows his quality as a communicator and the interlocutor showed she could keep up. This listener had the privilege of re-winding a few times!
I shall listen again at some point.
Well done
