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Technology Stocks : Dell Technologies Inc.
DELL 133.35+0.1%Nov 28 9:30 AM EST
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To: zurdo who wrote (72719)10/17/1998 5:37:00 AM
From: nihil  Read Replies (2) of 176387
 
RE: What's to stop two market makers

Market makers in options make money by capturing the spreads between bid and ask. They try to keep thin balanced positions, and quickly adjust their bid and ask to reflect movements in the market. If they are attentive and busy in an active market they can make an excellent living until they retire with a heart condition or anxiety attack. They try never to be long or short enough in any series to be wiped out by a market disaster. Position traders take long or short positions in an attempt to predict or influence the course of prices. They must guess correctly again and again. They have a probability of dying young and broke far higher than of living to a happy and prosperous old age. There are bold traders and even a few old traders, but there are no old, bold traders. Read Victor Niederhoffer's book Confessions of a Trader and observe the photographs of his lovely, grandiose house and his collection of New York primitive paintings. These now belong to someone else. I think he would have been happier if he had earned tenure at Berkeley (as would Theodore Kazinski), but who can say.

Your market makers would do better robbing a bank. It is illegal -- a felony -- for them to agree to fix prices. The Feds will jail them and take all of their money away. They will be ratted on by other MM's. Much cheaper to cover those calls or buy them back at the last moment.

You may have an excessively suspicious nature. You should think better of your fellow man. You should also note that the markets are full of stock cops, exchange monitors, crooks, jealous and treacherous competitors, and other devious types who cannot be trusted.
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