MM

Hi,

Could someone advise what it means when a prediction has "no MM"?

Thanks

I think it works as follows

1. with MM - if someone buys a new stock for say 50c that becomes the market and MM (basically ipredict) makes buy and sell orders (in about 1 cent increments) above and below. so when the next person enters the market they chew through the MM items on their way to whatever the price is they wish to attain. when that is reached the MM resets itself with above and below orders at that new level

2. with no MM buy and sell prices are simply the orders placed. There is a gap in between. That gap can be quite large. Nothing happens in terms of movement until someone accepts one of the orders. they may buy 1 or all of the stock being offered in an order.

Ipredict ran a MM and a non MM stock on the wellington mayoralty - at times you could buy the stock at different prices depending on which market you traded on.

Essentially though they are the same - I assume MM is used just to make about more action (noise) in the marketplace.

Thanks for your reply. The no MM situation makes sense now.
If I understand you correctly the MM effectively dampens the size of fluctuations in the current share price.

I understand that the MM costs iPredict a small amount of money to run (per stock), that is why not every stock has the MM running.



Edited 1 time(s). Last edit at 05/19/2014 10:33PM by pipe42.