The Market Maker: Part 1 - Spencer Crooks ex Director of Market Making at Winterfloods
Spencer Crooks, ex Director of Market Making at Winterfloods talks to Tamzin Freeman, piworld.
Spencer gives us a fascinating insight into the day in the life of a Market Maker. This is the first of two parts. The second part goes into more technical details of market making. Both parts are a must watch, to understand what’s going on behind the scenes to determine how stocks are priced.
Spencer’s background – 00:22
What do Market Makers do? – 01:35
Risk management by Market Makers 04:29
Market Makers: the institutions & retail 06:22
Market Makers: the business model 08:04
How do you set a price? 11:37
How do you set the spread? 14:32
How do you set the market size? 16:11
The difference between quote driven or order driven stocks 17:37
How helpful is Level 2 to the retail investor? – 19:18
The relationship with the broker – 21:40
What’s the relationship like between Market Makers? 25:38
How large is the research function at Winterfloods? 29:23
How many companies does an individual Market Maker cover? 30:45
How is a stock priced on the morning of a profit warning? 33:04
What makes a good market maker? 35:34
About Spencer Crooks: Joined Bisgood Bishop in 1985. After takeover of Bisgood Bishop, traded at County NatWest until 1988, before leaving to join Winterflood Securities. Became a director in August 1999. Appointed FSI 2006.