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Strategies & Market Trends : Level II Trading

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To: Dominick who wrote (305)	3/2/1998 9:32:00 AM
From: Jay Morrison	Read Replies (1) of 1086

<<As far as MM's are concerned.....They are the professionals and I the amateur.>> Dominick, I would not place too much weight behind the skills of market makers. I read an interview in Market Wizards with one of those super traders. He was describing a study he had seen on Citibank's trading division. Citibank had trading profits of $300 million for the year in question. However, if they had only been the bid/ask they would have had profits of $600 million. So in essence, their professionals lost the company $300 million thru trading positions. Citibank's response was that they have to be in the market to get business, but that argument is silly. Their business doesn't come from trading positions. Moral of the story: Market Makers are not the gods of trading that we sometimes make them out to be. :-) Jay

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