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It certainly happens in some super-real world. Right now it's the exception.
The puppet is any of the brokers. He is obliged to maintain liquidity in any way he can. The point of a broker is precisely to maintain liquidity. Even if in an unfair way. There are stories on the internet of clients heating up a broker on his desire to entice them. Then the clients go to jail and the broker is clean.
The point of a broker is to buy/sell on behalf of a client, receiving a commission. It is the market makers/liquidity providers who are required to maintain liquidity
The essence of a broker is to buy/sell on behalf of a client, receiving a commission. It is up to the market makers/liquidity providers to maintain liquidity
Oh, who needs it: to understand how trading is organised. There are a lot of scary words: margin, spread, spot, forward/futures, market maker (an incomprehensible category to some people ;)) one has to wonder why these currencies have 100% liquidity and the limits of that liquidity ;))... But some terms may be understood intuitively, while others may be called "dummy", and the shortcomings of trading systems may be declared as machinations of brokerage companies - no need to rack your brains ;) .....
The point of a broker is to buy/sell on behalf of the client, getting a commission. It is the market makers/liquidity providers who must maintain liquidity
Originally there was a broker. That is, an intermediary between the seller and the buyer. If there was no seller, but there was a buyer, or vice versa, what did the broker do?
Another question. When there is no sellers or buyers, what does a broker do? It is, after all, a normal situation when no one wants anything. Equilibrium. Flat. He does not starve to death. He starts quoting. He starts quoting to show that there's supposedly active bidding. But nothing's actually happening. So he attracts speculators and earns on the real spread and commission. That is quite normal for a broker. He will do what he wants with the price and you will be thinking about the balance sheet and other nonsense.
Where are your market makers/liquidity providers here?
Originally there was a broker. That is, an intermediary between the seller and the buyer. If there was no seller, but there was a buyer, or vice versa, what did the broker do?
Another question. When there is no sellers or buyers, what does a broker do? It is, after all, a normal situation when no one wants anything. Equilibrium. Flat. He does not starve to death. He starts quoting. He starts quoting to show that there's supposedly active bidding. But nothing is actually happening. So he attracts speculators and earns on the real spread and commission. This is quite normal for a broker. He will do what he wants with the price. And you will be thinking about the balance and other nonsense.
Where are your market makers/liquidity providers?
A situation where nobody wants anything is nonsense. There are always buyers and sellers in a currency or commodity or stock market ready to make deals, the question is at what price?
Now this is news:
Tell me how a broker, on an exchange, for example, can start "quoting" - " Showing that there is supposedly active trading going on. Although nothing is actually happening." ?
Originally there was a broker. That is, an intermediary between the seller and the buyer. If there was no seller, but there was a buyer, or vice versa, what did the broker do?
Another question. When there is no sellers or buyers, what does a broker do? It is, after all, a normal situation when no one wants anything. Equilibrium. Flat. He does not starve to death. He starts quoting. He starts quoting to show that there's supposedly active bidding. But nothing is actually happening. So he attracts speculators and earns on the real spread and commission. This is quite normal for a broker. He will do what he wants with the price and you will be thinking about the balance sheet and other nonsense.
Where are your market makers/liquidity providers here?
In the stock markets, there are market makers. A contract is signed with them, where the quotation conditions (quotation breaks and what the average spread is) are set out. You can read about it on the MMVB for example. On currency markets, liquidity providers who also quote. A broker is always just an intermediary. They have an appropriate license and an agreement with clients for intermediary services. In some very liquid markets, there are no special people who maintain the liquidity. The market is always full at the expense of enthusiasts.)
And to show that there is active trading going on and there isn't, the broker can't. For transactions and settlements are made on an exchange. In foreign exchange markets, liquidity providers do not show much other than their bids and offers
a situation where nobody wants anything is nonsense. There are always buyers and sellers in the market for currency or commodities or shares ready to make deals, the question is at what price?
Now this is news:
Tell me how a broker, on an exchange, for example, can start "quoting" - " Showing that there is supposedly active trading going on. But nothing is actually happening."?
In the exchange markets, there are market makers. You sign an agreement with them, specifying the quotation conditions (quotation breaks and what is the average spread). You can read it on the mwb for example. On currency markets, liquidity providers who also quote. A broker is always just an intermediary. They have an appropriate license and an agreement with clients for intermediary services. In some very liquid markets, there are no special people who maintain the liquidity. The market is always full at the expense of enthusiasts.)
And to show that there is active trading going on and there isn't, the broker cannot. Because transactions and settlements are made on the exchange. In the currency markets, liquidity providers do not show much besides their bids and offers.
You're the one who hasn't heard it yet. It's their way of having fun :-)) I've read somewhere in the Internet, how a group of traders increased the quotes of one penny stock, which nobody wanted, to 100 times. The broker was greedy. He saw the interest and raised the price. The guys took it and sold everything at his price. Then they were looking for them to go to jail. Some kind of manipulation :-)). They didn't do anything illegal though. The broker was not punished.
The guys were "swayed" - it was the guys who actually made the sale and purchase transactions on this paper
Although the story is fantastic - made up? Honestly!
The guys 'rocked' it - it was the guys who actually made the sale on this paper
Although the story is fantastic - made up? Fair enough!
The guys were only buying at first. So as not to be suspected right away, they were buying from the US and Estonia. The broker saw the interest and raised the price. Then they sold everything at his price. Look it up on the web. There was a site dedicated to trading. There are many similar and other stories there.
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Worldview breakdown is a painful thing. There is always something hard to accept.
The guys were only buying at first. So as not to be suspected, they were buying from the USA and Estonia. The broker saw the interest and raised the price. Then they sold everything at his price. Look it up on the web. There was a site dedicated to trading. There are many similar and other stories there.
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Worldview breakdown is a painful thing. There is always something hard to accept.
It is not a question of breaking the mindset, but of not understanding the essence of stock exchange processes.
The guys bought from themselves and "jacked up" the price - I understand.
The broker raised the price: I do not understand. The broker only executes client orders, how could he raise the price? Well, let's say the guys took it all and sold it at his price - so there was a buyer who bought from them. The broker only executed the bid.
The tale - calculate the costs of "the guys" on the bid-ask spread and overheads (the exchange, after all), calculate how to "jack up" the price to cover these costs and all this is not realistic.
Honestly - did you come up with this on your own?