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ChkitOut, Interesting observation. I wonder how they constantly keep an inventory of stock 50/50 long/short. Let's say you start out with 100 shares of XYZ stock long and 100 shares of XYZ stock short and stock XYZ currently trades at $100 per share and you begin to provide liquidity...

With a stock, how do you buy at a discount? I mean for a stock, its price is determined by the market, it's not like an ETF where you can instantly calculate its net asset value and post a bid that's below the NAV. A stock is only worth what market participants are willing to pay for. So I...

jsmooth, I was asking the question of how can liquidity provider in stocks hedge their exposure in options since the bid/ask spread in options would just kill you, not the other way around. I understand your analogy of the ticket scapler that tries to buy a ticket and immediately resell...

Steve, You say if the bid gets hit, and the liquidity provider will try to sell at higher price, but what if the price keeps going down (i.e. his bid repeatedly gets hit)? How would dumping his position to the next high bidder help? Wouldn't the liquidity provider lose money? I mean...

1. I don't think having 100s of stocks help since vast majority of stocks are highly correlated and move with the market. Most stocks are down by more than 60% as the market did and these liquidity providers have to hedge somehow as their bids are constantly getting hit, otherwise they would be...

I am wondering how do liquidity providing traders hedge their risk? Let's us they post both a bid and/or ask, and the bid gets hit. Now what if the stock price keeps going down? Is he not losing money now? How does he manage this directional risk? If he does fully hedge when his bid is hit...

I am curious to know if there is time decay associated with Ultra (bull) ETFs. I understand the tracking error associated with these ultra ETFs due to volatility: if the underlying index declines 10% in a day, then for a 2x Ultra ETF it would decline by 20%, so it would only take a 11% gain for...

I think we all need to write trouble tickets/call them to let them know the problem, this is unacceptable.

I noticed IB's market data (for a NYSEArca stock) constantly has the wrong Bid/Ask values, and is missing trades that actually took place (a trade which actually took place but is not reflected in the "Last Field"). I am wondering when are they going to fix this problem as you would think...

The TWS by itself is working fine. The problem arises when you try to connect your API software to it, then it freezes.

Yup, same problem here. After my software connects with TWS, TWS just freezes, and I have to force kill TWS through task manager.