AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Understanding Market Makers
This chapter explores the complex dynamics of market making, focusing on how market makers operate within exchanges while managing risks and generating profits. It discusses the use of call options for hedging against price volatility and emphasizes the delicate balance between providing liquidity and financial incentives. Real-world examples illuminate the strategies market makers employ, their role in stabilizing markets, and the challenges they face in a fluctuating environment.