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To: riposte who wrote (3888)	8/7/2000 3:07:12 AM
From: kas1	Respond to of 10934

That's the "job" of the MM's on the NASDAQ and Specialists on the NYSE, to provide liquidity for a security I believe that unlike a specialist, a market maker has no obligation to the exchange to provide liquidity and clearing. They work exclusively for themselves, not for the exchange-oriented purpose of "an orderly market" etc. Thus they only buy and sell voluntarily, not to provide an orderly market. I think their only obligation is to always quite a bid and ask for 100 shares of the stock in which they make a market; these prices need not be realistic however (e.g., if you aren't interested in buying NTAP, post a bid of $1). The caveat to this is market makers do not try to make money off of the direction the market is moving. They try to stay pretty close to market-neutral in orientation. They make their money on (spread x volume), not from the appreciation of their inventory. So when a market-maker is buying, it's for the spread, not because they think the stock will go up.