Prop Trading and Market Making in Stock Exchanges

This chapter focuses on the concepts of proprietary trading and market making, explaining the roles of traders and market makers in the financial markets. It discusses the importance of market makers in providing liquidity and maintaining fair bid-ask spreads. The chapter also highlights the use of analytical models and risk management strategies by market makers in options trading.

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Robert Leonard chats with Kevin Kennedy about the impact of technology, fiscal and monetary policy, options trading and exchanges, cryptocurrency, and the rise of retail investors, on the growth of the stock market, and much more!

IN THIS EPISODE, YOU’LL LEARN:

00:00 - Intro

17:30 - How technology has had an impact on the markets and the rise of retail investors.

26:55 - How to study markets today and if there’s a fundamental shift that makes this time truly “different”.

32:18 - How retail investors’ access to the markets changed how they function outside of fiscal and monetary policy.

33:01 - The recent growth in the options space and where Kevin sees it coming from.

33:01 - If the current growth in options trading is sustainable and if there is going to be a point where this can potentially crumble and backfire on speculative options traders.

37:25 - The different options exchanges the Nasdaq has and why six exchanges are necessary.

49:16 - Where the Nasdaq and the worlds of crypto and options collide.

51:09 - The future of capital markets and whether or not crypto will be part of it.

54:33 - Lessons Kevin learned as a trader and what major mistakes he made.

And much, much more!

BOOKS AND RESOURCES

Nasdaq.com XND microsite.
David Swensen’s book Pioneering Portfolio Management.
John Bogle’s book The Little Book of Common Sense Investing.
Joel Greenblatt’s book The Little Book That Still Beats the Market.
All of Robert’s favorite books.

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