When I came accross the Market Makers topic, I realised it is very important.

I am trading in London Stock Exchange, and I was wondering if the shares I am trading (BKIR) has Market Makers or they are working on SETS system? (because I understood by your text that it must be either one or the other).

Is it possible if they have Market Maker and SETS?

Sorry I write here but I do not know how to post a new message.

Thank you very much endeed for your website and advices.

Yours, Santiago.

Thank you for your email and apologies for the delay in responding. For some reason your email ended up in the wrong folder.

The reason you are able to sell your HBOS shares in a market that is falling fast is because the market makers are legally obliged to buy them. The market makers’ role is to sit in the middle between buyers and sellers and absorb oversupply as it comes onto the market. The corollary to that, of course, is what happens when they cannot meet demand and this is when they use market news and world events to manipulate market prices to increase selling or reduce buying.

Some markets do operate on a match basis such as the futures market where it is often called a zero sum game, in other words for every buyer there is a seller and vice versa.

As a starting point I would recommend Reminiscences of A Stock Operator by Edwin Le Fevre and Marber on Markets by Brian Marber (from Harriman House publishers) – he’s a real old lag but very readable. There are literally hundreds of other books and you may find one or two more on the Harriman website.

Hope the above helps.

Kind regards.

Anna