2 different takes. They feel less conflicted than they appear but made me wonder: How often do you think Citadel, Susq, and Jane St differ on the value of any particular option and how would the answer affect your take?https://twitter.com/nope_its_lily/status/1361117470027784192 …
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I'm guessing their inventories don't drive the positioning as much as you might expect. A bookie with sufficient capital doesn't balance order flow on a broken line. They maximize edge
This is important to realize. The way many of these firms are structured is that they have a pure MM book (keep inventory low, stay hedged, clip spreads) and prop books to express a view. The prop book can trade with the MM book at (to first approximation) mid and a lot of their
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price skew is driven by positions that the prop book puts on the MM book, rather than inventory that accumulates by MM activity.
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usually not that separate and clear cut. MM book reflects sup/dmd imbalance-determines skew. A % of that flow comes from prop desks, but mostly from ‘natural’ sources; funds of all stripes and sophisticated retail...etc. Who gets in at what level is the diff MM always participate
End of conversation
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@pdfmakerapp grab this - Show replies
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