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Posted On: 03/05/2022 3:08:12 PM
Post# of 149184
Market makers are supposed to provide liquidity not volume. Back in the days when the pit was actually active it made some sense. If there was no one on the other side of a trade the share price would effectively come to a halt and there would need to be a possible large share price differential for a trade to take place. This could increase volatility greatly.
In this day and age of online high speed trading the only stocks that are liable to halts are completely trash stocks that shouldn't be trading in the first place. Having market makers in place is a solid argument against allowing short selling. If short selling is valuable because it offers a correction to otherwise overpriced stocks then market makers work directly against this by stabilizing prices.
In this day and age of online high speed trading the only stocks that are liable to halts are completely trash stocks that shouldn't be trading in the first place. Having market makers in place is a solid argument against allowing short selling. If short selling is valuable because it offers a correction to otherwise overpriced stocks then market makers work directly against this by stabilizing prices.
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