rmorse
Sponsor
Quote from dumb_mother:
i think the only people who got their livelihoods taken away were the bad traders that simply followed the "well he bought so i should buy too strategy" copying known profitable traders. i don't feel bad for someone who had a copycat strategy not being able to keep up- anyone with a winning strat is still winning.
These market makers use the opposite strategy. A market maker makes two side markets all day and takes the other side of everyone trades. They made their money pricing options properly, managing their risk, and making money on the spread for taking the risk of adding depth and liquidity to the markets. That model no longer works for local traders with narrow spreads and order flow going to multiple exchanges. The cost of doing business as a "local" is higher with lower margins.