Thursday, November 01, 2007

Market Maker issues at Tradesports

My good friend Todd in the TS Forum (via Midas Oracle).

Market makers are not a substitute for liquidity. For instance, compare two $40 bil healthcare companies: BAX (Baxter Intl, NYSE w/ market maker) and GILD (Gilead Sciences, Nasdaq w/o market marker). GILD trades about $350 mil per day on average, vs. $190 mil for BAX.

Demand is the real key, some ingredients being:

trust
transparency
technology
transaction costs

Cost of carry is also an issue.

No comments:

Post a Comment