Hacker News new | ask | show | jobs
by totalZero 3030 days ago
> the spread that likely exists between the buyer and seller.

Spread doesn't have to favor a buyer.

1 comments

No, it typically favors the middleman.
You have to think about it in terms of who demonstrates excess demand for the trade.

If the buyer is more eager to transact, usually he ends up paying higher than fair value. The opposite is usually true if the seller is more eager for the transaction.

If you have an item of unique value, you may aggressively sell it, as in your initial post to which I had replied. But if you just post a price -- take out a classified ad every week, for example -- then you can wait for an eager buyer to come along.

Even the middleman often crosses the spread. A market-maker might have to clear out of excess risk/inventory ASAP, for example, which requires him to initiate transactions.