Link To Worrying Article From EliteTrader.com
Does this News Affect us Retail Traders?
Honestly I don’t know, but I’m sure some readers are asking “what does a market maker do?”. Answer: They provide liquidity in the market.
When you place your trade, a market maker might take that trade, thinking they can make a profit. Mostly they hedge, which is a cost in itself, like insurance. Sounds like leeching money from the market, right? No, they are a conduit. In the same way as any other business is conducted. We therefore need market makers.
My Own Concerns
Wherever there is a profit to be made, a horde of greedy ‘erberts* will try to jump on the bandwagon.Think ‘estate agents’. I think some market makers may have been squeezed out by smart tech, and big bucks. As traders, it is a concern that as a result, we will get squeezed. Example- the trade I placed for a credit of 18.5 this week, might therefore get placed at 16 without any competition for my options. Our market is changing. Technology and new smart thinking are adding another dimension.Taking little chunks out of us, or providing a service-the jury is out.
The Future of Options Trading
We are years behind the US here in the UK. There needs to be some new online platforms that permit us to do all the recognised strategies. In the same way eBay allows us to bid for that Jaguar. Tech has to be an integral part of our trading- I use 15 minute delayed prices, but get live prices on the phone from my broker. I like that. It’s personal and traditional. I’d like a platform that gives live free data ( or 1 minute delayed-who cares?) allowing me a global view. Not available. What are they so scared of?
I hope we have a free and fair market for all our trading-from derivatives to buying our fuel and food.
*Old English word for undesirables
