Re: Difference Between Poker and the Stock Market
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That's the way market makers USED to make money. Spreads are usually 1 or 2 cents. These days market makers make their money by out-trading the average trader.
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I can't really speak to stocks but this sounds pretty acurate. Back in the days of trading pits market makers would buy on the bid and sell on the offer and even then those spreads got tight. Not as tight as in today's electronic trading platforms though. The last bastion of true market makers is in illiquid stuff, options and spreads. These are the places where a true market maker can make a market and actually get paid for it. Electronic trading has changed the playing field enormously.
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