Start a new topic

Market Making Not Allowed?

When I try to place and buy yes and buy no orders at the same time to reduce the spread, I get the message that I'm not allowed to trade with myself. But I never place trades to execute with myself. For example, I might place an order to buy Yes shares at 51c and No shares at 47c. These two offers will not clear with each other. I should be allowed to place these two trades simultaneously. 


Perhaps this is a glitch. Perhaps it's intentional. I think market making (reducing the spread between bid and ask prices) is an important activity in any market. MMs produce liquidity and essentially make markets reflect the true opinions of the traders more accurately. 


6 people like this idea

I used to manage a futures trading desk, so i am familiar with trading in markets that I know nothing about. After predicting on here for a couple of weeks I have come to the conclusion that trading is frowned upon. They do many things to make it hard to trade actively. Bad charts, no historical data, bid and ask so screwy I practically have to transcribe to a piece of paper to figure out where to place my bid, the "can't trade with yourself" even though you aren't, etc. They want us to bet out hard earned money on whether we think Obama's approval rating is between 44.5 and 44.9, but we want to trade it like it's pork bellies. This is a research project, not a trading platform, which is why it's legal, and incredibly frustrating to trade actively.

The problem is the system never lets you put in an order that take you past parity, without first closing out your "yes" or "no" position. When at parity, it only lets you put in orders on one side. I agree that makes no sense and leads to wider bid-ask spread and less liquid / more volatile markets. Please fix this!


4 people like this

I've noticed that you also can't easily reverse positions. Say I have 50 Yes shares, and I change my mind and want to end up with 50 No shares. I can't put in an order to sell 100 Yes. I can't put in an order to sell 50 Yes and also to buy 50 No. I have to sell 50 Yes, wait for that order to be accepted, and then buy 50 No. 


The whole Buy Yes/Buy No thing is annoying. Wish we would just have positive (long) and negative (short) positions a la Intrade. 


6 people like this
Login to post a comment