>> > that OmniPay is like any exchange provider >> >> Note the use of the term "exchange provider" where market maker is >>mistakenly >> used. As JP May pointed out, market makers are legally obligated >>to offer a bid >> and ask price when open for business. Exchange providers can set >>their own bid >> and ask prices whenever and however they want. >> >> jf > >Could you please explain how those definitions are different. Does this >mean that exchange providers can set their bid and ask prices when they >aren't open for business? I must be missing some subtle point here. > >Viking Coder Viking, the term "MARKET MAKER" carries the following implication: that you WILL ALWAYS HIT. The term comes from equity stock markets. The people who are MMs in a given stock, have a buy price and a sell price, and, they will fill ANY ORDER, EITHER DIRECTION at any time. For instance a friend of a friend of mine is a market maker in MSFT stock (he works for one of the big brokerage houses -- I forget which). He sits there all day and sets a buy and sell price, and NEVER doesn't take a deal. (Indeed Nasdaq and AMEX have rules about "how much" market makers must do -- etc) To make another example, walk down to the financial center in Manhattan and go in to see the trading pits in Nymex. Look at say the oil trading pit or copper trading pit. See all the traders running around, taking trades. A couple of the entities there are indeed market makers (they have a difference color shirt or something) -- they literally "make the market" in sweet light crude or whatever the commodity is: they have a stated price at any time, and they'll take the trade no matter what. (A risky and usually profitable but sometimes disastrous business!) At any rate, if you use the phrase "market maker", you are literally saying "the difference between me and anyone else trading in this stuff, is, I make the market, ie, I will ALWAYS take a trade, at my stated price." there are many excellent e-gold<-->dollar exchange providers, whether gold age, goldfingercoin, or whatever. I own one! coconutgold.com Now ---- e-gold (unfortunately, IMHO) started the trend of calling these entities "market makers" This is farsical. *kitco*, for god's sake, wouldn't decribe itself as a market maker. they're just someone who buys and sells a little bullion. Now, remarkably enough, e-gold (or GSR -- whatever -- it confuses the hell out of me, sorry :) ) *REALLY* *IS* a market maker. IE, at any given moment they have abuy and sell rate posted and THEY WILL HONOR IT if you place an order. (That is exceedingly admirable, I think.) So for instance on coconutgold.com (read it) it says something like "I wouldn't presume to call myself a market maker, but I often do trades -- email me and I'll see if I can trade". (By all means, if any of the community of exchange providers feel that they now do so much business, and they have such incredibly big balls that they could HONESTLY take the position of being a market maker -- ie, they will take any order, at any time, for their currently stated prices, and fill it -- if that's the case, fine, that entity has progressed to being able to realistically call themselves a "market maker" as opposed to "someone who buys and sells egold for currencies".) (The other day someone emailed me wondering if it is possible to get *TEN TONNES* of gold -- I'll pass them right along!) Anyway, anyone who's spent 5 minutes working in or around any markets (equities, derivatives, commodities) will tell you that a MM is someone who "makes a market", ie, is the "trader of last resort" if you will --- who will always take any size trade at any moment, at their current price. >Does this mean that exchange providers can set their bid and ask prices when they aren't open for business? Exchange providers can do whatever the hell they want, in a completely ad hoc manner. Why not? Some charge more, some charge less. Some charge a flat fee, I believe -- some charge a percentage. Some charge nothing -- some somtimes offer a PREMIUM when they are too short or long. They often turn down deals they cant fill, or, fill 'em but leave the dealer waiting for a while whilst the stock comes in. (All perfectly reasonable if done openly.) Some go out of business, some dont trade on Wednesdays, some have holidays for a few weeks, some wont do more than ten trades in a day, some wont trade over 500 bucks, some wont trade under 200 bucks, some deal only in credit cards, some only in wire transfers, some are oriented at certain ethnic or regional groups. At coconut for instance we only deal in kilo-like quantities so I negotiate each trade individually. I had trouble sending a wire to a *war zone* once, so I now charge much more when someone wants me to send a wire to a war zone. (!) Etc etc. (So for example, if you write to coconut and say "sell me 100 dollars of gold!" I will just say "sorry I dont do trades that small". On other occasions I might say "sorry, I cant do that trade for ten kilos today -- sorry!", or whatever. This is the case with all the exchange providers [again, if anyone, other than Omnipay, wants to assert they are now honestly able to call themselves a "market maker" -- magnificent!] ... because they're making no claim to being market makers. But Omnipay (or whatever its called) IS IN FACT a market maker: they WILL FILL ORDERS, when they're open for business, at a posted price, and they always post a buy and sell price. Market maker. Once again, it was very unfortunate* (and I have no idea why it happened) that e-gold called all the e-gold buyers/sellers "market makers". The best term is "exchange providers" or "peope who buy and sell e-gold for currencies" or "kick ass places to buy or sell your egold!!" or perhaps simply "egold shops" or "egold dealers" or "egold traders" --JPM ___ *proof that if you do as much RIGHT as egold you occasionally screw up! :) --- You are currently subscribed to e-gold-list as: [email protected] To unsubscribe send a blank email to [EMAIL PROTECTED]
