Liquidity Takers = Gamblers?

[shortie]

Is it this simple: liquidity takers are gamblers playing against odds, liquidity providers have odds in their favor? I reason that the market does not give a rat's asss who makes money, but the market always needs liquidity and pays premium to those willing to provide it. So, liquidity providers are on the same side as the market. This leaves liquidity takers to play with odds stuck up against them.

Please feel free to pound me

 

[Lucrum]

Do I get a cookie for voting?

 

[intradaybill]

Quote from shortie:

Is it this simple: liquidity takers are gamblers playing against odds, liquidity providers have odds in their favor? I reason that the market does not give a rat's asss who makes money, but the market always needs liquidity and pays premium to those willing to provide it. So, liquidity providers are on the same side as the market. This leaves liquidity takers to play with odds stuck up against them.

Please feel free to pound me

Please define:

(a) Liquidity taker

(b) Liquidity provider

 

[shortie]

Quote from intradaybill:

Please define:

(a) Liquidity taker

(b) Liquidity provider

let's say you would like to sell 100 shares of MSFT. you see a bid on island for 27.20 and you are happy with the price, so you hit it with your sell order. You just took some liquidity from the market because now there are less bids hanging in there. On the other hand, if you were not happy with the price you might have put a limit order to sell your shares @27.50. In this case you added the liquidity because you added an ask to the market.

So, adding a bid/ask that is not immediately hit is adding liquidity. hitting a bid/ask that is already in the market is taking the liquidity.

 

[ElCubano]

Quote from intradaybill:

Please define:

(a) Liquidity taker

(b) Liquidity provider

a) My Wife

b) Me

 

[alientrader]

this is nonsense. i take liquidity away all the time.

you trade where the action is at, bid or offer dosent matter

 

[IV_Trader]

Quote from ElCubano:

a) My Wife

b) Me

 

[intradaybill]

Quote from shortie:

So, adding a bid/ask that is not immediately hit is adding liquidity. hitting a bid/ask that is already in the market is taking the liquidity.

Specialists hit bid/ask all the time to provide liquidity, so what you say is in conflict with that notion.

 

[shortie]

Quote from intradaybill:

Specialists hit bid/ask all the time to provide liquidity, so what you say is in conflict with that notion.

maybe they do it as part of their routine. but i don't see how they provide liquidity by hitting bid/ask. in my understanding liquidity equals bid/ask offers on the book. if somebody removes those offers, they remove liquidity.

 

[snowhite]

you dumbass have no idea.