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.
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!
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.