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Non-Tech : Meet Gene, a NASDAQ Market Maker

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To: Jack Hartmann who wrote (78)7/26/2000 10:56:08 PM
From: gene_the_mm  Read Replies (3) of 1426
 
JACK...

There is NO limit to how wide a spread can be on a stock, as far as I know. A stock's spread is a function of the liquidity of that issue and represents the amount of risk involved in trading such an issue.

Thus, if an MM is going to risk losing 5 points by buying or selling a thinly traded stock the spread will probably be at least a point or more.

Simply, the greater the risk in the stock the wider the spread you will find.

All the best,

-- Gene
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