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Table of Contents
Table of Contents
Market making is the engine that provides liquidity and tight spreads in financial markets, yet its mechanics remain opaque to many finance professionals. This course demystifies the art and science of quoting bid and ask prices across asset classes.
What You Will Learn
- 1 Learn the foundational principles of market making and its role in market microstructure.
- 2 Understand order book dynamics, including limit orders, market orders, and order flow imbalance.
- 3 Apply pricing models to set bid-ask spreads that balance profit and risk.
- 4 Implement risk management techniques such as hedging, position limits, and stop-loss rules.
- 5 Explore algorithmic market making strategies including latency arbitrage and rebate-driven tactics.
- 6 Analyze inventory management methods to control exposure and carry costs.
- 7 Comprehend the regulatory frameworks governing market making, including SEC, FINRA, and MiFID II requirements.
- 8 Evaluate technology infrastructure needs for low-latency trading and connectivity.
- 9 Assess the impact of volatility and market impact on market making profitability.
- 10 Develop performance measurement approaches using metrics like Sharpe ratio, hit rate, and return on capital.
What's Included
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Market Making Methods