Can also the MM (market makers) lose?

Discussion in 'Newbie Questions' started by lucacrebbe, Mar 30, 2019.

  1. lucacrebbe

    lucacrebbe Trader

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    Can also the whales lose? What if they try to force the price to breack a resistence (buying a lot of stocks), but there is not so much liquidity for they to cash out being in profit?
     
  2. Enivid

    Enivid Administrator Staff Member

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    Yes, market makers can definitely lose - market-making in some of the modern markets is very difficult, especially during times of unexpected volatility.

    As for your question on cashing out after forcing a breakout through resistance, that's not how the market makers work, especially in stocks.
     
  3. Ann

    Ann Active Trader

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    Yes, market makers can lose at some point in time. For example, in one day. I heard that some dealing bring sellers with buyers within themselves, within $50K. That is, they are ready to lose no more than 50 thousand dollars. If the total amount is more, they will bring the transaction to the interbank.They act as market makers, only in the range of 50 thousand.
     
  4. Mary Z

    Mary Z Trader

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    Market Makers generally have the risk of loosing all the time, But they are smart in their game plans. That is why some brokers shut down and disappear!;)
     

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