While dealers (market makers) do indeed make profits from changes in their inventory, they are at risk by providing capital to take the other side of certain trades.
The lack of understanding this simple statement, in part, helps originate the conspiracy theories.
Last time I checked, the whole idea of a Capitalist system included the concept of profit as a reward to one's risk taking endeavors. Yes, it is true that if one invests, (I think speculates, when dealing with bb fleas, is a better word), taking one side against another, the resulting idea is closer to 'competition' indeed, war comes to mind. --where there are winners and losers.
May the best man/woman win.
Are the odds against the individual investor [I quote "the little guy"], particularly when dealing in bb fleas? Well, probably so, but as stated above market participants, m/m or otherwise are in it for the money, not as charitable institutions.
Therefore, It only makes sense to participate in the market in the companies, and/or situations where odds are more favorable to the individual. Understanding risk is of prime importance for traders/investors.
Efforts to study financial analysis, risk assessment and human/market psychology is for traders. Conspiracy decoding is for spies. |
