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Non-Tech : Market Makers - What They Do and How They Do It

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To: DanZ who wrote (254)6/29/1999 9:43:00 PM
From: Savant  Read Replies (1) of 429
 
The market maker will either be NET short, NET long, or flat.
They can and do get caught short on an upswing and will add to that short position on price increases, hoping to eventually recoup their money by buying lower than the increasing average price. On a down turn from their original position, they can and do add to the original position.
The question you posed is a good one...What DOES constitute a "bona
fide market making activity"..LOL
Best, Savant
Any corrections appreciated
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