[82716f12]

Being a market maker vs "We have a fancy trading algorithm that statistically is never going to outperform just buying VOO and holding it, but the thing is if you get lucky, it could" are two very different things lol

Moreover, I would be very surprised if the majority of their $8 billion annual profit came from client market making.

[ActorNightly]

Right, exactly what I said. They don't make money by market making. They make money by charging transaction fees, and on an access basis to their "algorithms" which are designed against analyzing the complex futures that they are the market maker for.

The incentive for users to sign up with them is to get access to "better" pricing for whatever commodity they pair the buy/sell orders for - but remember these are futures so its all betting, and so the algorithms don't really mean anything.

[dumah]

They don’t charge fees, because they’re not a brokerage or exchange.

They pay fees to exchanges.

As a market maker, some rebates are given back conditional on their activity.

They have no users.

You’re just constantly obliviously asserting falsehoods that betray an almost comical lack of understanding of the reality of these businesses.

[82716f12]

My understanding of these firms is limited too, but I’ve never heard of market makers charging transaction fees.

Isn’t it actually the opposite? they pay for order flow instead? They should be making money from bid-ask spread, not fees.

[Redoubts]

> Right, exactly what I said. They don't make money by market making

“client market making”. That’s very different from “market making”, you two are not in agreement at all here