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Please explain smoething to me.

keetskeets Posts: 25,351 ✭✭✭✭✭
in U.S. Coin Forum
What is the definition of the much bandied about term Market Maker?

Al H.

Comments

  • krankykranky Posts: 8,709 ✭✭✭
    To me, it implies someone who desires to support a two-way market in certain coins, buying and selling at a reasonable spread.

    Sell for $500, buy for $50? Not a market maker.
    Sell for $500, buy for $400? OK.

    New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.

  • MrSpudMrSpud Posts: 4,499 ✭✭✭
    Market Maker defined
  • GemineyeGemineye Posts: 5,374 ✭
    Similar to a Broker............. buyer/seller...........
    ......Larry........image
  • keetskeets Posts: 25,351 ✭✭✭✭✭
    thanks MrSpud. it ocurrs to me that i've arrived at the answer as to why many are frustrated with moderns and why classics enjoy more relaxed trading-----the GreySheet. love it or hate it, the GreySheet offers a starting point for buying and selling that the vast majority of dealers use and are willing to agree with in substance. if that were in place with modern issues it would provide a starting reference point.
  • GemineyeGemineye Posts: 5,374 ✭
    Don't they jail people who influence the market...................image
    ......Larry........image
  • HobbyistHobbyist Posts: 215


    << <i>Market Maker defined >>



    A market maker is a person or a firm which quotes a buy and sell price in a financial instrument or commodity hoping to make a profit on the turn or the bid/offer spread.

    So how does this help the person selling their coins? Can there be good markets without market makers? Will someone make out well dealing their coins to a market maker or will they be treated like commodities (widgets?)?
    Time sure flies when you don't know what you're doing...
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  • 291fifth291fifth Posts: 24,426 ✭✭✭✭✭
    Someone who actively buys and sells a specialized item at a predictable level of margin.
    All glory is fleeting.
  • RussRuss Posts: 48,514 ✭✭✭


    << <i>Can there be good markets without market makers? >>



    Of course.

    Russ, NCNE
    eBay consignment sales | | Collectibles from Resco CCC
  • HobbyistHobbyist Posts: 215


    << <i>

    << <i>Can there be good markets without market makers? >>



    Of course.

    >>



    When I read the definition, I immediately thought "So what?"
    Time sure flies when you don't know what you're doing...
    My Web Sites
  • WTCGWTCG Posts: 8,940 ✭✭✭


    << <i>What is the definition of the much bandied about term Market Maker?

    Al H. >>



    Someone or some company who controls and specializes in a certain type of coin.

    On the same subject, there are more market makers in Morgan Dollars than there are for any other U.S. denomination or type.
    Follow me on Twitter @wtcgroup
    Authorized dealer for PCGS, PCGS Currency, NGC, NCS, PMG, CAC. Member of the PNG, ANA. Member dealer of CoinPlex and CCE/FACTS as "CH5"
  • MrEurekaMrEureka Posts: 24,304 ✭✭✭✭✭
    For rare coins, I'd take the definition one step further. Market makers make sight-unseen markets. Sight-seen trading doesn't take place in "markets", it takes place at auction or through bilateral negotiation.
    Andy Lustig

    Doggedly collecting coins of the Central American Republic.

    Visit the Society of US Pattern Collectors at USPatterns.com.
  • RedTigerRedTiger Posts: 5,608 ✭
    For coins there is the electronic CCE (Certified Coin Exchange) where dealers post to buy at certain prices (the bid price), and other dealers look to buy coins at a certain level (the ask price). If a firm is a market maker they will post both bid and ask on the same item, hence the term two-way market. Having one or more market makers adds liquidity and generally results in lower buy/sell spreads, more places to buy or sell for collectors, and more coins available to the collecting public.

    A dealer who doesn't specialize in one area can buy from a collector and sell them for a semi-reasonable price to the market maker. When there is no market maker, that dealer will often say "pass" or offer an absurdly low price for the item(s).
    Investment blog: gold, stocks and more
  • GeminiGemini Posts: 3,085 ✭


    << <i>thanks MrSpud. it ocurrs to me that i've arrived at the answer as to why many are frustrated with moderns and why classics enjoy more relaxed trading-----the GreySheet. love it or hate it, the GreySheet offers a starting point for buying and selling that the vast majority of dealers use and are willing to agree with in substance. if that were in place with modern issues it would provide a starting reference point. >>

    Good point.
    A thing of beauty is a joy for ever
  • BAJJERFANBAJJERFAN Posts: 31,131 ✭✭✭✭✭
    A market maker is a person or a firm which quotes a buy and sell price in a financial instrument or commodity hoping to make a profit on the turn or the bid/offer spread.

    So how does this help the person selling their coins? Can there be good markets without market makers? Will someone make out well dealing their coins to a market maker or will they be treated like commodities (widgets?)?

    *********

    Her implication seems to be that a MM is at least a venue to sell to tho there is NO GUARANTEE that a MM WILL BUY your coin at the price that you want for it if you need to sell it today!!
    theknowitalltroll;
  • sinin1sinin1 Posts: 7,500 ✭
    marketmakers are really only needed in thinly traded markets and frequently subsidized by the promoters of that market


    marketmakers do not want to keep inventory long (scalp quick)
  • krankykranky Posts: 8,709 ✭✭✭


    << <i>it ocurrs to me that i've arrived at the answer as to why many are frustrated with moderns and why classics enjoy more relaxed trading-----the GreySheet. love it or hate it, the GreySheet offers a starting point for buying and selling that the vast majority of dealers use and are willing to agree with in substance. if that were in place with modern issues it would provide a starting reference point. >>



    I agree. While it's often said "the Sheet doesn't buy coins", it does at least provide that starting point. You might remember I told you about that Cleveland show a while back when I offered a early 1950's Jefferson proof to the dealer who had a nice inventory of like coins - he offered $40 for mine, as compared to the coin he was selling (same year but a grade lower than mine) which was priced at $200. One data point doesn't prove anything, of course, but having some credible pricing reference could only help.

    On the other hand, it's possible that it could backfire. If there was a Greysheet for moderns, it could end up that more dealers would decline to make any offer for some coins instead of what we might consider a low-ball offer. If the Sheet has a coin for $500, I don't think many dealers would offer $100. They would probably pass altogether rather than have the customer who knows the sheet price go ballistic over the low offer.

    New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.

  • BAJJERFANBAJJERFAN Posts: 31,131 ✭✭✭✭✭
    Of course if you have nice stuff you DON'T NEED a MM or a big dealer. You can do quite well on your own.
    theknowitalltroll;

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