Market Makers don't manipulate price— we're trapped by our own hedging requirements. When SPX drifts between long and short strikes, our systems start buying and selling futures in ways that create predictable paths. (short thread)

worse yet, you absolve yourself of the accountability needed to grow and develop into a successful trader the minute you start externalizing your locus of control to some shady group of "market makers" you've lost the plot as a trader.

if you can't explain how the thing you're claiming would even work- and why it would be logical from the economic perspective of the business and/or risk-taking entity- then you have no business engaging in nonsense, and you're going to fail as a trader

not platitudes. platitudes, hand-waving, etc... these are the fallbacks of frauds (conscious or otherwise)

- or better yet. challenge them. "explain it"

the minute you see someone claiming "conspiracy" or "market makers targeted XYZ" run

These adaptations are not manipulation they are not conspiracies to hurt customers. in fact, they're just basic requirements to enable the continuation of what we're there to do in the first place: provide liquidity

because if I don't adapt to the position, it's probably going to hurt me

in fact, it's just "the opposite of someone's view" but now, I have to account for it in my PNL suddenly I'm part market maker, part prop / HF

I always thought of it this way I am a market maker - I'm seeking neutrality if I can't stay neutral, I "have a view" that view may not be mine. it may be the opposite of what I want to do.

so you price them accordingly against you (sold it? price it high) to justify carrying the position, and taking more if need be- and move on to more complex model based solutions like modified vol paths, in order to defensively manage the part of your book you're forced to carry

sometimes you can't really do much about the positions you're left with. When JPM lifts 20 different market makers on the collar every quarter, and everyone is forced to hold the same exact position without a natural counterparty... you have to have other solutions

your position's greeks aren't static- they're dynamic. you have a big long skew position in March but a short skew position in June? Maybe you are flat the options in both maturities right now, but look down 5% on your scenario reports and suddenly you're short a ton of vega

Balancing your primary greek exposures at the option level isn't enough obviously- it can get you into trouble if you stop there. So you become skilled at deconstructing the option exposures across the term structure, working into and out of positions that avoid major

beyond that, you have option exposure. vega. gamma. theta. you want to balance all of this, but in practice not all options are the same. you can't go pitching thousands of 7dte options into a bid because you bought 100 1y straddles and your model says you're long vega.

Your prioritization depends on how much PNL variance you might attribute to a particular exposure again- delta is the obvious one. yes, option dealers hedge away the delta the details of how this is done in practice vary across firms and are subject to constraints you don't

Balanced books can have tens of thousands of contracts, long & short, of varying quantities across term structure and strike space. but option risk is minimized when the book is embedded with paired-off positions, neutralizing second and third order greeks

A market making book should be balanced. You think "delta hedging" - but it goes way beyond that A balanced book is one in which risk in general is spread off- there's no single overly concentrated risk in the position.

Most of what you think is manipulation is just managing positions. As market makers we don't have opinions on every trade -we can't. it's not how the business model makes money >>

"From one thing, know ten thousand things" - Bloomberg's quote of the day (love it)

This logic in the image (which doc correctly flags as suspect) ...literally doesn't make sense. It fundamentally misrepresents what's actually going on in a market making book.. and how we make money carrying and spreading positions like this. ...but it's an AI account. —so