At the End of an Era
Traders Magazine, July 2003
Market makers, including specialists on stock exchanges, came about because of the discontinuity of order flow in the trading arena. There was no way to assure the regular, almost simultaneous arrival of like-sized buy and sell orders. Once the New York Stock Exchange moved from a periodic call to a continuous market, at which all trading in each security occurred at one time, some brokers discovered that they could make a substantial sum of money on a regular basis. That could be done by buying and selling for their own account when corresponding contra orders were not readily available.
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