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 Do market makers and clients have a conflict of interest?
 
 4/16/2007 4:29:01 PM
User is offlinefrancesco
66 posts
www.tescari.com




Do market makers and clients have a conflict of interest?
Market makers are not intermediaries, portofilio managers, or advisors, who represent customers (while earning commission). Instead, they buy and sell currencies to the customer, in this case the trade. By definition, the market maker always provides a two-sided quote (the sell and the buy price), and thus is indifferent in regards to the intention of the trader. Banks do that, as do merchants in the markets, who both buy from, and sell to, their customers. The relationship between the trader (the customer) and the market maker (the bank; the trading platform; etc.) is simply based on the fundamental market forces of supply and demand.
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