To me, a market maker is one that makes a "two-way market" as discussed on these forums.
Many dealers offer "one-way markets" is that they don't buy at anywhere near their sale prices, so a buyer cannot be expected to sell back to the dealer.
@ErrorsOnCoins said:
There are Market Makers in very thin markets where there is no exchange, quote system, or sheet.
Indeed. In my definitions a "market maker" is simply the highest bidder and it is the highest bidder that puts a floor under every market. When you advertise to pay bid plus 10% and you honor the bid then you've raised the bid 10%.
I think what some are calling "market makers" are major market players who buy and sell extensively. They do often set the bid price but some of the big guys won't always pay bid. Coins flow to whomever is paying the most even if it's a wholesaler or someone with a closed client list.
Coins are hard for most people to sell so many coins trade at bid.
So the retail customer is the market maker? This makes no sense to me.
@ErrorsOnCoins said:
There are Market Makers in very thin markets where there is no exchange, quote system, or sheet.
Indeed. In my definitions a "market maker" is simply the highest bidder and it is the highest bidder that puts a floor under every market. When you advertise to pay bid plus 10% and you honor the bid then you've raised the bid 10%.
I think what some are calling "market makers" are major market players who buy and sell extensively. They do often set the bid price but some of the big guys won't always pay bid. Coins flow to whomever is paying the most even if it's a wholesaler or someone with a closed client list.
Coins are hard for most people to sell so many coins trade at bid.
So the retail customer is the market maker? This makes no sense to me.
Retail customers do not "bid" on coins. Generally they want a single example. Part of being a "market maker" is the willingness to and act of honoring your bids. B Max Mehl wasn't a true "market maker" in 1913 liberty nickels because it is necessary to honor your bid. But by the same token he popularized the coin and affected its price,
But anyone, even a collector, can be a market maker by simply buying every coin offered at his bid price.
Not every market maker can have the highest bid (or lowest ask) and failure to have it doesn’t mean they’re not a market maker.
I don't disagree.
If someone is buying and selling a lot of just about anything then I don't think it's a stretch to call them "market makers". And of course you're right that they can control buy and sell prices in markets.
I suppose there is no hard and fast definition for anything.
@ErrorsOnCoins said:
There are Market Makers in very thin markets where there is no exchange, quote system, or sheet.
Indeed. In my definitions a "market maker" is simply the highest bidder and it is the highest bidder that puts a floor under every market. When you advertise to pay bid plus 10% and you honor the bid then you've raised the bid 10%.
I think what some are calling "market makers" are major market players who buy and sell extensively. They do often set the bid price but some of the big guys won't always pay bid. Coins flow to whomever is paying the most even if it's a wholesaler or someone with a closed client list.
Coins are hard for most people to sell so many coins trade at bid.
So the retail customer is the market maker? This makes no sense to me.
Retail customers do not "bid" on coins. Generally they want a single example. Part of being a "market maker" is the willingness to and act of honoring your bids. B Max Mehl wasn't a true "market maker" in 1913 liberty nickels because it is necessary to honor your bid. But by the same token he popularized the coin and affected its price,
But anyone, even a collector, can be a market maker by simply buying every coin offered at his bid price.
Even if a collector buys every coin offered at his bid price, unless he is also making some of them available as part of a two way market, he’s not a market maker.
See the numerous other posts in this thread. The definition of a market maker isn’t particularly complicated and there’s fairly widespread agreement regarding what it means, other than, perhaps, in this thread.😉
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Not every market maker can have the highest bid (or lowest ask) and failure to have it doesn’t mean they’re not a market maker.
I don't disagree.
If someone is buying and selling a lot of just about anything then I don't think it's a stretch to call them "market makers". And of course you're right that they can control buy and sell prices in markets.
I suppose there is no hard and fast definition for anything.
Guess not. Obviously it's possible to stretch and broaden any word or term to the point of relative meaningless for one's own personal use. Or also to tighten and make more strict to make definitions hard and fast. Not sure why though. 🤔
@ErrorsOnCoins said:
There are Market Makers in very thin markets where there is no exchange, quote system, or sheet.
Indeed. In my definitions a "market maker" is simply the highest bidder and it is the highest bidder that puts a floor under every market. When you advertise to pay bid plus 10% and you honor the bid then you've raised the bid 10%.
I think what some are calling "market makers" are major market players who buy and sell extensively. They do often set the bid price but some of the big guys won't always pay bid. Coins flow to whomever is paying the most even if it's a wholesaler or someone with a closed client list.
Coins are hard for most people to sell so many coins trade at bid.
So the retail customer is the market maker? This makes no sense to me.
Retail customers do not "bid" on coins. Generally they want a single example. Part of being a "market maker" is the willingness to and act of honoring your bids. B Max Mehl wasn't a true "market maker" in 1913 liberty nickels because it is necessary to honor your bid. But by the same token he popularized the coin and affected its price,
But anyone, even a collector, can be a market maker by simply buying every coin offered at his bid price.
Even if a collector buys every coin offered at his bid price, unless he is also making some of them available as part of a two way market, he’s not a market maker.
See the numerous other posts in this thread. The definition of a market maker isn’t particularly complicated and there’s fairly widespread agreement regarding what it means, other than, perhaps, in this thread.😉
@ErrorsOnCoins said:
There are Market Makers in very thin markets where there is no exchange, quote system, or sheet.
Indeed. In my definitions a "market maker" is simply the highest bidder and it is the highest bidder that puts a floor under every market. When you advertise to pay bid plus 10% and you honor the bid then you've raised the bid 10%.
I think what some are calling "market makers" are major market players who buy and sell extensively. They do often set the bid price but some of the big guys won't always pay bid. Coins flow to whomever is paying the most even if it's a wholesaler or someone with a closed client list.
Coins are hard for most people to sell so many coins trade at bid.
So the retail customer is the market maker? This makes no sense to me.
Retail customers do not "bid" on coins. Generally they want a single example. Part of being a "market maker" is the willingness to and act of honoring your bids. B Max Mehl wasn't a true "market maker" in 1913 liberty nickels because it is necessary to honor your bid. But by the same token he popularized the coin and affected its price,
But anyone, even a collector, can be a market maker by simply buying every coin offered at his bid price.
Even if a collector buys every coin offered at his bid price, unless he is also making some of them available as part of a two way market, he’s not a market maker.
See the numerous other posts in this thread. The definition of a market maker isn’t particularly complicated and there’s fairly widespread agreement regarding what it means, other than, perhaps, in this thread.😉
I'm sure it's somehow my fault.
Duh!😉
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Market makers quote bid/ask prices on a commodity.
Simply dealing doesn't make you a market maker.
Promotion doesn't make you a maker maker.
If you've got an open bid/ask on 1881-S Morgan $s in PCGS plastic, you are a market maker in 1881S Morgans
Simplistic. But recognized that it's only intended to address a fragment of the answer.
First a caveat. I made up every price in this post. They are quite likely to be superficially reasonable. But they exist purely to concretize concepts, If they were 20% off in either direction, the concepts, the actual market mechanisms, would still be operating in the same way. Don't be distracted by minutia.
If you've got a open bid/ask for a "significant" quantity of coins you're a market maker. If you want one 66 Saint at $3600 you are not making a market, you have a potential sale for one single coin. Or maybe you want five more at the same price. Knowing they almost always come to you as singletons, bidding for one coin shows interest. If someone calls with one, "I can use another at the same price if you have it?". "I have five". See my below example using S-VDB's. That's not market-making.
Market makers keep on buying. They damn well better keep on selling.
If you're participating in a true wholesale two-way market, you will buy and sell in quantity. If this isn't the Truth, it's what coin dealers will expect. MS67 CAC Saints may be an exception
Heritage is a true market maker in bullion gold. Got 1000 AU $20's. They have a number they can put on them. Might include the cost of hedging overnight.
CAC, the single biggest market-maker in the rare coin segment of the industry, will bid (hypothetically) $2250 for up to 5 pieces of MS65 Saints. . Once that buy has been reached, they can pull pull the bid. But CAC will very likely have, at the same time, a bid for up to 10 pieces at $2200 and be happy to take an additional 10 at the same price. I'm guessing they'd take 100 at 2050 or more. My guess is their actual spreads are tighter.
I once called John Love, who was the king of bulk-dollar markets ( though he would never have called himself that) for decades. Told him I had just made some common date white MS65 Peace and Morgans $$, scored big, and just wanted the quick hit. When I told him I had maybe 15 each, he told me he had known me for a long time and as a courtesy would take them. Paraphrasing: "I really want quantities. I usually won't buy in lots smaller than 100 pieces". John's sell price, in the same quantities, is usually $4 higher than his buy( for 100-piece lots). He might pay $1.50 less per coin in bag quantities, but his spread may then be $2.25 a coin (for 1000 coins at a time).
@EagleEye is a a specialist in small cents. He does not want to buy 5 of anything unless he's almost forced to. An exception might be an original roll. He'll be inclined to investigate. But he's a market maker in that he has a decent bid on every coin in the series at most any worthwhile profit-inducing grade. Now FORCE him to buy five MS66+RD S-VDB's (he likes). Maybe. Not knowing exactly where that market is right now, let's say he has a bid up of $7250 on 09-S VDB's because every quarter, like clockwork, he sells two. Maybe at $8250. That bid is virtually always up at some price, as they are for the other dates. That Rick is a market maker.
This Rick is not. But I'm a market player. Call me with 5 pieces at $6500 and I'll be on the phone to Mr. Snow immediately. BTW at 6200 I'm just buy the group and assume all the risk (such as it is).
Flyboy: I'll actually buy two at $7250 because I've got them on want lists, but I can't use the other three right now".
CJ: "How about the other three at $6750 and 30 days."
Flyboy: Done! You sure are easier to deal with than @MrEurekaHis prices are right, but he seems fixated on me paying shipping (both ways).
CJ: 40 years of eating out with him and he hasn't bought me dinner once. Go figure.
Flyboy: And he drinks two-thirds of every wine that's brought to the table. @Charmy has him on BYOB status.
Many dealer-to-dealer phone calls involve sharing complaints about a dear friend. Festivus doesn't come often enough.
I would love to be able to draw up some flowcharts and pictorial workflows based on decision-trees and critical path analysis. I myself usually integrate subjects like this from both a macro and a micro view. Visual for macro are decidedly better than text.
I'm going to exclude @FredWeinberg and EOC because every error is unique, and thus non-fungible, If you told me they were market-makers I wouldn't argue. But if you ask me, my return comment will be "Those two are very active niche specialists and real go-to guys".
Based on my long and wide exposure to a great many facets of the market, I likely left at least one major concept and tonnes of nuances on the table. Not a masters thesis! Any more question? Ask @MFeld
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - Geo. Orwell
Market makers quote bid/ask prices on a commodity.
Simply dealing doesn't make you a market maker.
Promotion doesn't make you a maker maker.
If you've got an open bid/ask on 1881-S Morgan $s in PCGS plastic, you are a market maker in 1881S Morgans
Simplistic. But recognized that it's only intended to address a fragment of the answer.
First a caveat. I made up every price in this post. They are quite likely to be superficially reasonable. But they exist purely to concretize concepts, If they were 20% off in either direction, the concepts, the actual market mechanisms, would still be operating in the same way. Don't be distracted by minutia.
If you've got a open bid/ask for a "significant" quantity of coins you're a market maker. If you want one 66 Saint at $3600 you are not making a market, you have a potential sale for one single coin. Or maybe you want five more at the same price. Knowing they almost always come to you as singletons, bidding for one coin shows interest. If someone calls with one, "I can use another at the same price if you have it?". "I have five". See my below example using S-VDB's. That's not market-making.
Market makers keep on buying. They damn well better keep on selling.
If you're participating in a true wholesale two-way market, you will buy and sell in quantity. If this isn't the Truth, it's what coin dealers will expect. MS67 CAC Saints may be an exception
Heritage is a true market maker in bullion gold. Got 1000 AU $20's. They have a number they can put on them. Might include the cost of hedging overnight.
CAC, the single biggest market-maker in the rare coin segment of the industry, will bid (hypothetically) $2250 for up to 5 pieces of MS65 Saints. . Once that buy has been reached, they can pull pull the bid. But CAC will very likely have, at the same time, a bid for up to 10 pieces at $2200 and be happy to take an additional 10 at the same price. I'm guessing they'd take 100 at 2050 or more. My guess is their actual spreads are tighter.
I once called John Love, who was the king of bulk-dollar markets ( though he would never have called himself that) for decades. Told him I had just made some common date white MS65 Peace and Morgans $$, scored big, and just wanted the quick hit. When I told him I had maybe 15 each, he told me he had known me for a long time and as a courtesy would take them. Paraphrasing: "I really want quantities. I usually won't buy in lots smaller than 100 pieces". John's sell price, in the same quantities, is usually $4 higher than his buy( for 100-piece lots). He might pay $1.50 less per coin in bag quantities, but his spread may then be $2.25 a coin (for 1000 coins at a time).
@EagleEye is a a specialist in small cents. He does not want to buy 5 of anything unless he's almost forced to. An exception might be an original roll. He'll be inclined to investigate. But he's a market maker in that he has a decent bid on every coin in the series at most any worthwhile profit-inducing grade. Now FORCE him to buy five MS66+RD S-VDB's (he likes). Maybe. Not knowing exactly where that market is right now, let's say he has a bid up of $7250 on 09-S VDB's because every quarter, like clockwork, he sells two. Maybe at $8250. That bid is virtually always up at some price, as they are for the other dates. That Rick is a market maker.
This Rick is not. But I'm a market player. Call me with 5 pieces at $6500 and I'll be on the phone to Mr. Snow immediately. BTW at 6200 I'm just buy the group and assume all the risk (such as it is).
Flyboy: I'll actually buy two at $7250 because I've got them on want lists, but I can't use the other three right now".
CJ: "How about the other three at $6750 and 30 days."
Flyboy: Done! You sure are easier to deal with than @MrEurekaHis prices are right, but he seems fixated on me paying shipping (both ways).
CJ: 40 years of eating out with him and he hasn't bought me dinner once. Go figure.
Flyboy: And he drinks two-thirds of every wine that's brought to the table. @Charmy has him on BYOB status.
Many dealer-to-dealer phone calls involve sharing complaints about a dear friend. Festivus doesn't come often enough.
I would love to be able to draw up some flowcharts and pictorial workflows based on decision-trees and critical path analysis. I myself usually integrate subjects like this from both a macro and a micro view. Visual for macro are decidedly better than text.
I'm going to exclude @FredWeinberg and EOC because every error is unique, and thus non-fungible, If you told me they were market-makers I wouldn't argue. But if you ask me, my return comment will be "Those two are very active niche specialists and real go-to guys".
Based on my long and wide exposure to a great many facets of the market, I likely left at least one major concept and tonnes of nuances on the table. Not a masters thesis! Any more question? Ask @MFeld
Market makers quote bid/ask prices on a commodity.
Simply dealing doesn't make you a market maker.
Promotion doesn't make you a maker maker.
If you've got an open bid/ask on 1881-S Morgan $s in PCGS plastic, you are a market maker in 1881S Morgans
Simplistic. But recognized that it's only intended to address a fragment of the answer.
First a caveat. I made up every price in this post. They are quite likely to be superficially reasonable. But they exist purely to concretize concepts, If they were 20% off in either direction, the concepts, the actual market mechanisms, would still be operating in the same way. Don't be distracted by minutia.
If you've got a open bid/ask for a "significant" quantity of coins you're a market maker. If you want one 66 Saint at $3600 you are not making a market, you have a potential sale for one single coin. Or maybe you want five more at the same price. Knowing they almost always come to you as singletons, bidding for one coin shows interest. If someone calls with one, "I can use another at the same price if you have it?". "I have five". See my below example using S-VDB's. That's not market-making.
Market makers keep on buying. They damn well better keep on selling.
If you're participating in a true wholesale two-way market, you will buy and sell in quantity. If this isn't the Truth, it's what coin dealers will expect. MS67 CAC Saints may be an exception
Heritage is a true market maker in bullion gold. Got 1000 AU $20's. They have a number they can put on them. Might include the cost of hedging overnight.
CAC, the single biggest market-maker in the rare coin segment of the industry, will bid (hypothetically) $2250 for up to 5 pieces of MS65 Saints. . Once that buy has been reached, they can pull pull the bid. But CAC will very likely have, at the same time, a bid for up to 10 pieces at $2200 and be happy to take an additional 10 at the same price. I'm guessing they'd take 100 at 2050 or more. My guess is their actual spreads are tighter.
I once called John Love, who was the king of bulk-dollar markets ( though he would never have called himself that) for decades. Told him I had just made some common date white MS65 Peace and Morgans $$, scored big, and just wanted the quick hit. When I told him I had maybe 15 each, he told me he had known me for a long time and as a courtesy would take them. Paraphrasing: "I really want quantities. I usually won't buy in lots smaller than 100 pieces". John's sell price, in the same quantities, is usually $4 higher than his buy( for 100-piece lots). He might pay $1.50 less per coin in bag quantities, but his spread may then be $2.25 a coin (for 1000 coins at a time).
@EagleEye is a a specialist in small cents. He does not want to buy 5 of anything unless he's almost forced to. An exception might be an original roll. He'll be inclined to investigate. But he's a market maker in that he has a decent bid on every coin in the series at most any worthwhile profit-inducing grade. Now FORCE him to buy five MS66+RD S-VDB's (he likes). Maybe. Not knowing exactly where that market is right now, let's say he has a bid up of $7250 on 09-S VDB's because every quarter, like clockwork, he sells two. Maybe at $8250. That bid is virtually always up at some price, as they are for the other dates. That Rick is a market maker.
This Rick is not. But I'm a market player. Call me with 5 pieces at $6500 and I'll be on the phone to Mr. Snow immediately. BTW at 6200 I'm just buy the group and assume all the risk (such as it is).
Flyboy: I'll actually buy two at $7250 because I've got them on want lists, but I can't use the other three right now".
CJ: "How about the other three at $6750 and 30 days."
Flyboy: Done! You sure are easier to deal with than @MrEurekaHis prices are right, but he seems fixated on me paying shipping (both ways).
CJ: 40 years of eating out with him and he hasn't bought me dinner once. Go figure.
Flyboy: And he drinks two-thirds of every wine that's brought to the table. @Charmy has him on BYOB status.
Many dealer-to-dealer phone calls involve sharing complaints about a dear friend. Festivus doesn't come often enough.
I would love to be able to draw up some flowcharts and pictorial workflows based on decision-trees and critical path analysis. I myself usually integrate subjects like this from both a macro and a micro view. Visual for macro are decidedly better than text.
I'm going to exclude @FredWeinberg and EOC because every error is unique, and thus non-fungible, If you told me they were market-makers I wouldn't argue. But if you ask me, my return comment will be "Those two are very active niche specialists and real go-to guys".
Based on my long and wide exposure to a great many facets of the market, I likely left at least one major concept and tonnes of nuances on the table. Not a masters thesis! Any more question? Ask @MFeld
Hey, look, we agree!
If you're sucking up, it'll likely work
"People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf." - Geo. Orwell
Market makers quote bid/ask prices on a commodity.
Simply dealing doesn't make you a market maker.
Promotion doesn't make you a maker maker.
If you've got an open bid/ask on 1881-S Morgan $s in PCGS plastic, you are a market maker in 1881S Morgans
Simplistic. But recognized that it's only intended to address a fragment of the answer.
First a caveat. I made up every price in this post. They are quite likely to be superficially reasonable. But they exist purely to concretize concepts, If they were 20% off in either direction, the concepts, the actual market mechanisms, would still be operating in the same way. Don't be distracted by minutia.
If you've got a open bid/ask for a "significant" quantity of coins you're a market maker. If you want one 66 Saint at $3600 you are not making a market, you have a potential sale for one single coin. Or maybe you want five more at the same price. Knowing they almost always come to you as singletons, bidding for one coin shows interest. If someone calls with one, "I can use another at the same price if you have it?". "I have five". See my below example using S-VDB's. That's not market-making.
Market makers keep on buying. They damn well better keep on selling.
If you're participating in a true wholesale two-way market, you will buy and sell in quantity. If this isn't the Truth, it's what coin dealers will expect. MS67 CAC Saints may be an exception
Heritage is a true market maker in bullion gold. Got 1000 AU $20's. They have a number they can put on them. Might include the cost of hedging overnight.
CAC, the single biggest market-maker in the rare coin segment of the industry, will bid (hypothetically) $2250 for up to 5 pieces of MS65 Saints. . Once that buy has been reached, they can pull pull the bid. But CAC will very likely have, at the same time, a bid for up to 10 pieces at $2200 and be happy to take an additional 10 at the same price. I'm guessing they'd take 100 at 2050 or more. My guess is their actual spreads are tighter.
I once called John Love, who was the king of bulk-dollar markets ( though he would never have called himself that) for decades. Told him I had just made some common date white MS65 Peace and Morgans $$, scored big, and just wanted the quick hit. When I told him I had maybe 15 each, he told me he had known me for a long time and as a courtesy would take them. Paraphrasing: "I really want quantities. I usually won't buy in lots smaller than 100 pieces". John's sell price, in the same quantities, is usually $4 higher than his buy( for 100-piece lots). He might pay $1.50 less per coin in bag quantities, but his spread may then be $2.25 a coin (for 1000 coins at a time).
@EagleEye is a a specialist in small cents. He does not want to buy 5 of anything unless he's almost forced to. An exception might be an original roll. He'll be inclined to investigate. But he's a market maker in that he has a decent bid on every coin in the series at most any worthwhile profit-inducing grade. Now FORCE him to buy five MS66+RD S-VDB's (he likes). Maybe. Not knowing exactly where that market is right now, let's say he has a bid up of $7250 on 09-S VDB's because every quarter, like clockwork, he sells two. Maybe at $8250. That bid is virtually always up at some price, as they are for the other dates. That Rick is a market maker.
This Rick is not. But I'm a market player. Call me with 5 pieces at $6500 and I'll be on the phone to Mr. Snow immediately. BTW at 6200 I'm just buy the group and assume all the risk (such as it is).
Flyboy: I'll actually buy two at $7250 because I've got them on want lists, but I can't use the other three right now".
CJ: "How about the other three at $6750 and 30 days."
Flyboy: Done! You sure are easier to deal with than @MrEurekaHis prices are right, but he seems fixated on me paying shipping (both ways).
CJ: 40 years of eating out with him and he hasn't bought me dinner once. Go figure.
Flyboy: And he drinks two-thirds of every wine that's brought to the table. @Charmy has him on BYOB status.
Many dealer-to-dealer phone calls involve sharing complaints about a dear friend. Festivus doesn't come often enough.
I would love to be able to draw up some flowcharts and pictorial workflows based on decision-trees and critical path analysis. I myself usually integrate subjects like this from both a macro and a micro view. Visual for macro are decidedly better than text.
I'm going to exclude @FredWeinberg and EOC because every error is unique, and thus non-fungible, If you told me they were market-makers I wouldn't argue. But if you ask me, my return comment will be "Those two are very active niche specialists and real go-to guys".
Based on my long and wide exposure to a great many facets of the market, I likely left at least one major concept and tonnes of nuances on the table. Not a masters thesis! Any more question? Ask @MFeld
Hey, look, we agree!
If you're sucking up, it'll likely work
LOL. It hasn't yet.
“Everything that irritates us about others can lead us to an understanding of ourselves.” Carl Jung
Not every market maker can have the highest bid (or lowest ask) and failure to have it doesn’t mean they’re not a market maker.
I don't disagree.
If someone is buying and selling a lot of just about anything then I don't think it's a stretch to call them "market makers". And of course you're right that they can control buy and sell prices in markets.
I suppose there is no hard and fast definition for anything.
Guess not. Obviously it's possible to stretch and broaden any word or term to the point of relative meaningless for one's own personal use. Or also to tighten and make more strict to make definitions hard and fast. Not sure why though. 🤔
I simply think of the term as "someone who sets the price of a coin". If any entity starts paying over bid then bid increases for everyone and the entity has affected the price of the coin.
By your definition anyone who buys and sell a lot of a coin is a market maker and might only respond to price increases or decreases.
It's easy to buy coins cheap. It's not easy to get full value for them so anyone paying over bid has good customers.
I do agree with you that definitions should be as specific as possible while maintaining accuracy and usefulness. I had not been aware my definition of this term deviated in any way from what other people used. It's a small point, though. Most "market makers" do buy and sell extensively and often pay the highest price. There is a high correlation in the real world.
I simply think of the term as "someone who sets the price of a coin". If any entity starts paying over bid then bid increases for everyone and the entity has affected the price of the coin. ... Most "market makers" do buy and sell extensively and often pay the highest price. There is a high correlation in the real world.
I was introduced to this term years ago at a show. I overheard a dealer conversing with a customer who was offering to sell a box of Morgans to the dealer. The dealer said that he was interested in many of them and that they could discuss a price, "but since I'm the market maker on the 1903-Os, I must and will offer highest bid on those".
I always find 'insider coin dealer lingo' interesting so I subsequently confirmed the meaning of this new concept with other dealers. That seems to be essentially in line with @cladking 's definition - "someone who sets the price of a coin".
Comments
To me, a market maker is one that makes a "two-way market" as discussed on these forums.
Many dealers offer "one-way markets" is that they don't buy at anywhere near their sale prices, so a buyer cannot be expected to sell back to the dealer.
NASDAQ market makers only need to show the best bid or ask a fraction of the time to maintain their status.
So the retail customer is the market maker? This makes no sense to me.
Retail customers do not "bid" on coins. Generally they want a single example. Part of being a "market maker" is the willingness to and act of honoring your bids. B Max Mehl wasn't a true "market maker" in 1913 liberty nickels because it is necessary to honor your bid. But by the same token he popularized the coin and affected its price,
But anyone, even a collector, can be a market maker by simply buying every coin offered at his bid price.
I don't disagree.
If someone is buying and selling a lot of just about anything then I don't think it's a stretch to call them "market makers". And of course you're right that they can control buy and sell prices in markets.
I suppose there is no hard and fast definition for anything.
Even if a collector buys every coin offered at his bid price, unless he is also making some of them available as part of a two way market, he’s not a market maker.
See the numerous other posts in this thread. The definition of a market maker isn’t particularly complicated and there’s fairly widespread agreement regarding what it means, other than, perhaps, in this thread.😉
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
Guess not. Obviously it's possible to stretch and broaden any word or term to the point of relative meaningless for one's own personal use. Or also to tighten and make more strict to make definitions hard and fast. Not sure why though. 🤔
Liberty: Parent of Science & Industry
He’s forever young and perpetually retired!
"Got a flaming heart, can't get my fill"
I'm sure it's somehow my fault.
Duh!😉
Mark Feld* of Heritage Auctions*Unless otherwise noted, my posts here represent my personal opinions.
The hobbyist keeps the market alive. Good promoters are key.
``https://ebay.us/m/KxolR5
.> @jmlanzaf said:
Simplistic. But recognized that it's only intended to address a fragment of the answer.
First a caveat. I made up every price in this post. They are quite likely to be superficially reasonable. But they exist purely to concretize concepts, If they were 20% off in either direction, the concepts, the actual market mechanisms, would still be operating in the same way. Don't be distracted by minutia.
If you've got a open bid/ask for a "significant" quantity of coins you're a market maker. If you want one 66 Saint at $3600 you are not making a market, you have a potential sale for one single coin. Or maybe you want five more at the same price. Knowing they almost always come to you as singletons, bidding for one coin shows interest. If someone calls with one, "I can use another at the same price if you have it?". "I have five". See my below example using S-VDB's. That's not market-making.
Market makers keep on buying. They damn well better keep on selling.
If you're participating in a true wholesale two-way market, you will buy and sell in quantity. If this isn't the Truth, it's what coin dealers will expect. MS67 CAC Saints may be an exception
Heritage is a true market maker in bullion gold. Got 1000 AU $20's. They have a number they can put on them. Might include the cost of hedging overnight.
CAC, the single biggest market-maker in the rare coin segment of the industry, will bid (hypothetically) $2250 for up to 5 pieces of MS65 Saints. . Once that buy has been reached, they can pull pull the bid. But CAC will very likely have, at the same time, a bid for up to 10 pieces at $2200 and be happy to take an additional 10 at the same price. I'm guessing they'd take 100 at 2050 or more. My guess is their actual spreads are tighter.
I once called John Love, who was the king of bulk-dollar markets ( though he would never have called himself that) for decades. Told him I had just made some common date white MS65 Peace and Morgans $$, scored big, and just wanted the quick hit. When I told him I had maybe 15 each, he told me he had known me for a long time and as a courtesy would take them. Paraphrasing: "I really want quantities. I usually won't buy in lots smaller than 100 pieces". John's sell price, in the same quantities, is usually $4 higher than his buy( for 100-piece lots). He might pay $1.50 less per coin in bag quantities, but his spread may then be $2.25 a coin (for 1000 coins at a time).
@EagleEye is a a specialist in small cents. He does not want to buy 5 of anything unless he's almost forced to. An exception might be an original roll. He'll be inclined to investigate. But he's a market maker in that he has a decent bid on every coin in the series at most any worthwhile profit-inducing grade. Now FORCE him to buy five MS66+RD S-VDB's (he likes). Maybe. Not knowing exactly where that market is right now, let's say he has a bid up of $7250 on 09-S VDB's because every quarter, like clockwork, he sells two. Maybe at $8250. That bid is virtually always up at some price, as they are for the other dates. That Rick is a market maker.
This Rick is not. But I'm a market player. Call me with 5 pieces at $6500 and I'll be on the phone to Mr. Snow immediately. BTW at 6200 I'm just buy the group and assume all the risk (such as it is).
Flyboy: I'll actually buy two at $7250 because I've got them on want lists, but I can't use the other three right now".
CJ: "How about the other three at $6750 and 30 days."
Flyboy: Done! You sure are easier to deal with than @MrEurekaHis prices are right, but he seems fixated on me paying shipping (both ways).
CJ: 40 years of eating out with him and he hasn't bought me dinner once. Go figure.
Flyboy: And he drinks two-thirds of every wine that's brought to the table. @Charmy has him on BYOB status.
Many dealer-to-dealer phone calls involve sharing complaints about a dear friend.
Festivus doesn't come often enough.
I would love to be able to draw up some flowcharts and pictorial workflows based on decision-trees and critical path analysis. I myself usually integrate subjects like this from both a macro and a micro view. Visual for macro are decidedly better than text.
I'm going to exclude @FredWeinberg and EOC because every error is unique, and thus non-fungible, If you told me they were market-makers I wouldn't argue. But if you ask me, my return comment will be "Those two are very active niche specialists and real go-to guys".
Based on my long and wide exposure to a great many facets of the market, I likely left at least one major concept and tonnes of nuances on the table. Not a masters thesis! Any more question? Ask @MFeld
Hey, look, we agree!
If you're sucking up, it'll likely work
LOL. It hasn't yet.
“Everything that irritates us about others can lead us to an understanding of ourselves.” Carl Jung
I simply think of the term as "someone who sets the price of a coin". If any entity starts paying over bid then bid increases for everyone and the entity has affected the price of the coin.
By your definition anyone who buys and sell a lot of a coin is a market maker and might only respond to price increases or decreases.
It's easy to buy coins cheap. It's not easy to get full value for them so anyone paying over bid has good customers.
I do agree with you that definitions should be as specific as possible while maintaining accuracy and usefulness. I had not been aware my definition of this term deviated in any way from what other people used. It's a small point, though. Most "market makers" do buy and sell extensively and often pay the highest price. There is a high correlation in the real world.
I was introduced to this term years ago at a show. I overheard a dealer conversing with a customer who was offering to sell a box of Morgans to the dealer. The dealer said that he was interested in many of them and that they could discuss a price, "but since I'm the market maker on the 1903-Os, I must and will offer highest bid on those".
I always find 'insider coin dealer lingo' interesting so I subsequently confirmed the meaning of this new concept with other dealers. That seems to be essentially in line with @cladking 's definition - "someone who sets the price of a coin".