The point of being a literal marketmaker is someone who stands ready to buy or sell at a published price at all times. The implication is that it is an ongoing position - they do so over time.
There's a bunch of things that a marketmaker has to do to do his job, but then there are the things he does that defines the job. Does that make sense?
The simple fact is that Goldman is not publishing a price in it right this second, and you can't call them up and buy or sell shares right now.
The marketmaker's job is to literally make a market. They aren't doing that. Just providing some liqudity.
Re: FIX and order routing: Do you know what a hidden quantity is? No fair googling. I concede on FIX, though.
Sorry, it's the josh-u in the name. "Tom" bugs me a bit too.
You're obviously right regarding Goldman not publishing prices; I'm just saying, being sloppy about terms --- particular when you're just being sloppy about what kind of dealer we're talking about --- doesn't mean you don't know what a market maker is.
It's Joshu because Joshua is usually taken -- and because Joshu was a 7th century Zen Buddhist master, the comparison of which to my anxiety-ridden self makes me giggle.
Yeah, I meant, I'm sorry, not "you should pick a better nick".
I don't need to look up that market makers are dealers. :)
I have a weirdly low-level perspective on markets for weird reasons; I'm fascinated by the kind of stuff you worked on at MS, but still picking it up. Ironically, the iceberg stuff is directly relevant to what I actually do get to do with this stuff.
Icebergs are when someone is trying to do a much larger trade, piecewise. This is what my group at MS facilitated (automated algorithmic execution of order flow.)
Hidden quantities are an order type that some markets have that allow you to hide the total amount you place in an order, more or less.
As luck would have it, one of my best guys is a former MM -ish trader on the CBOE.
For whatever it's worth: total agreement with you that GS isn't acting as a MM (after an earful about delta and position risk and volatility risk and long strangles and gahhhhh). He says "GS is a BD, MM's can't trade for clients" and a bunch of other stuff.
You are 100% right. GS is not a market maker. "Doing trades that help provide liquidity to Facebook instruments that somehow down the line helps build a market for Facebook" is in no way the same thing as "being a market maker". People should stop saying "market maker" when they mean "market helper" or something else.
On the other hand, had no clue what a hidden quantity was; neither did my exchange engineer friend. So I feel a little less dumb. He knew what an iceberg order was. Also, note that there's at least one exchange that doesn't draw a distinction.
The point of being a literal marketmaker is someone who stands ready to buy or sell at a published price at all times. The implication is that it is an ongoing position - they do so over time.
There's a bunch of things that a marketmaker has to do to do his job, but then there are the things he does that defines the job. Does that make sense?
The simple fact is that Goldman is not publishing a price in it right this second, and you can't call them up and buy or sell shares right now.
The marketmaker's job is to literally make a market. They aren't doing that. Just providing some liqudity.
Re: FIX and order routing: Do you know what a hidden quantity is? No fair googling. I concede on FIX, though.