I am a market-maker. As a market-maker it is my job to provide liquidity for the clients who call my firm and seek it.  I hope to make revenues by capturing implicit fees in the bid-offer spreads that I put out for potential trades. I manage risk in two ways. first, by finding the equilibrium level or indifference level for which I can comfortably take either side of a trade. Sometimes too many people come in on the same side. I attempt to adjust my price to re-capture the dynamic equilibrium point.

It is generally not my job to look at the macro issues in the market place. There are times when due to my service and liquidity provision, my own risk is unbalanced. If no external exit is available, I seek internal methods to mitigate this risk. Sometimes I find other traders with an interest in balancing their portfolio risk and happen to have the opposite risk profile as my own.

There are also times when other traders at the firm seek to trade with me internally to alleviate their own risk.  and finally, There are times when the risk of the firm are imbalanced and need to be alleviated. At these times I access the markets as a market taker and preserve the company’s balance sheet.

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~  The Fmxconnect Team