hard · Volume Spread Analysis background-trend-context
A market-maker is bearish and expects lower prices. According to the mechanics of price discovery, how will they likely react when a retail buy order enters during a temporary rally?
- They will withhold their quote to create a gap-up in the market.
- They will offer a 'good' price to the buyer, effectively capping the upside and narrowing the spread.
- They will widen the spread to increase their profit margin on the transaction.
- They will mark the price up sharply to discourage the buyer from entering.
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