Shalom,
Shalom.
This reminded me that market makers have more expenses.....
I don't like this term "market maker." The term should refer to arbitrageurs and institutional investors who make the market, or to the broker-dealers who place orders directly on the stock exchanges. I think the correct English language term for the people who exchange money and are currency experts is "cambist." The term in Spanish is cambio. Another term would be "exchange provider." In the New Testament, the term "money changer" comes up.
I do not understand the market makers business.
It is a tough and not rewarding one.
I think it has its rewards. It depends on what you want to do with your life.
Feel free to enlighten us on the ways to make money being a market maker.
An exchange provider makes fees taking orders. Ideally, he makes fees by selling digital gold and makes fees by buying digital gold. Every once in a while, exchangers of high reputation get very large orders and are able to place them with bullion dealers or other major suppliers.
Exchangers can also sometimes make money by providing advice on the movement of information including information about money. Many successful exchangers offer other services, such as debit cards, hosting, or what have you. There are also several key exchangers who also operate currencies.
For example, you operate the Internet dollar currency, right?
How a market maker does reduce his risk of Gold price changes?
"Does Macy's tell Gimbel's?" I don't think there is any deep dark secret here. If you have a long position on gold, you benefit from any increase in the price of gold. You can match that long position with a short position which hedges your risk of a price decrease. As you sell out of the long position, you sell out of the short position, so that your risk of price changes is always in balance. Since you can leverage your short position and since you can sometimes see the price of gold moving within a channel (recently it touched a lower channel marker, intra-day, of $384 so I felt it was a good bet it would recover all the way to $400) you can minimize your hedging costs.
My best advice to you is to call John Kyle on the phone and have him design a hedge position for you so that you are always in fine fettle. He can probably hook you up with a good broker for the short, too.
Still looking for lenders....
How much do you seek to borrow? Contact me off list, please.
Regards,
Jim
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