difference between market-making and just proprietary trading?

Quote from MTE:

..... being able to see the order flow and haircuts based margining, to name a few.
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Yes, that's the sort of answer I was looking for. Wonder how useful order flow is ?
 
The benefits of order flow are a little more subtle than that. Imagine a rising market and you have been hit on the bid. You immediately have the bid ask spread as a cushion (stop loss) for your long if you know there are other orders there to buy too.
 
Quote from Profitaker:
Wonder how useful order flow is ?
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Very. One can avoid stepping in front of a running train given the info i.e. Goldman just sold a ton of 9m10y, so I'd avoid getting long gamma, since they might have more to do.

Also, a market maker would generally maintain a negative gamma bias. This way, in quiet times he's long theta, while in volatile time he'd be the first one to see the bids and lean his markets accordingly.
 
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