Adding to JPM...
Market makers need to be very good at managing risk --> they need to know how to
hedge. (Supposedly, part of the california power problem is our local energy
provider, PG&E, refused to hedge back when prices were relatively cheap. They could
have bought a bunch of calls or sold a bunch of puts that could have insulated them
from part of an increase in prices.)
What if gold (or MSFT or Crude oil) closes one day at xx and the next day opens down
20%. (It you are not hedged or worse, long, you just took a bath.) Doesn't matter to
market makers -- they still must take trades -- even if it means being bankrupt at
the end of the day. Exchange providers don't have to do anything.
> 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.
---
You are currently subscribed to e-gold-list as: [email protected]
To unsubscribe send a blank email to [EMAIL PROTECTED]
