A dealer can be sitting at his desk and get a call saying that one of his institutional relationships wants to sell 50,000 shares of a particular issue. He may then look at an IOI intranet (his firms' sales traders) or an extranet (like AutEx, etc.) for a cross. Assuming there is one, on a 50K share order the commission for a cross such as the one I've described may well be in the neighborhood of $2000 to $3000, all without risking a single penny of firm capital. That's a single order; a firm with a deep book and lots of flow might, in an active market, get many of those orders of varying size each day across their army of trades and institutional salespeople.
Or, a stock may be trading at 50 to 50 1/2, and a seller of 100,000 shares may call the trader to arrange a block distribution. Depending upon a plethora of factors, the block may, by way of example, be bought by the firm at a 2 point markdown (48 or so - you get the idea) - and may subsequently be fed into the market at the 50 1/2 price, held in inventory (perhaps the trader thinks that the stock will be going up), or sold to other clients via the sales force (again the commissions).
If indeed the trader determined to liquidate the 100,000 share block immediately...and, assuming that the market was ticking down from the aforementioned 50 1/2, resulting in the entire order was done in pieces at, say, an average price of 50 1/8...you're looking at $212,500 gross.
The purpose of these two examples? To reiterate that the $300 argument, applied to professional trading firms, is only a hair short of ludicrous. The buying and selling out of inventory in the way that retail investors are familiar with is but a single facet of the way that market makers produce revenue.
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