Can Market Makers Fail?

[newtrader101]

I've been reading off and on about the roles played by market makers. If you are in the know about this topic, please do share your insights:

Who are all the players in the market besides retail traders, market makers, big institutions (banks etc), specialists, ...?
Do the MMs have a plan for each day/week?
Who determines the range of a trading day?
When do market makers fail? i.e Can the market move out of their control?
When do market makers lose money?

 

[ram2010]

Do Fii's and Domestic funds Make loss?

Where to get that data?

 

[ImogenBeaumont]

I doubt they are all in coordination and share the same goal, all of them and their daily attempts move and impact the market, not just one single syndicate of influential players but rather all of them.

 

[newtrader101]

Do Fii's and Domestic funds Make loss?

Where to get that data?

Of course they make losses. Because they don't have full control over the market. Battle of the bulls and bears means the big institutions on either side right. Not retail.

My belief is that MMs also lose control sometimes. That's why sometimes wild movements happen.

 

[stoch]

I've been reading off and on about the roles played by market makers. If you are in the know about this topic, please do share your insights:

Who are all the players in the market besides retail traders, market makers, big institutions (banks etc), specialists, ...?
Do the MMs have a plan for each day/week?
Who determines the range of a trading day?
When do market makers fail? i.e Can the market move out of their control?
When do market makers lose money?

Market makers i.e. dealers profit from spread and receive loss from having too much exposure to the asset which price declines a lot. I don't think that range of the day is determined by large market players. One way or another there is incoming information which may be bad or good for the market price and some unpredictable events which affects the price too. Of course we talk about competitive liquid markets, situation can be different for example for second-class stocks or crypto where manipulations are indeed possible.

 

[Sneha Rajan]

Yes, market makers can fail. Although they play a crucial role in providing liquidity and stability to financial markets by continuously buying and selling securities, several factors can lead to their failure. These include severe market volatility, significant financial losses, inadequate risk management, and systemic crises. When market makers fail, it can result in reduced market liquidity, increased bid-ask spreads, and greater price volatility, potentially impacting the overall stability of financial markets.

 

[stoch]

Markets fail when liquidity drains or there is some rare event like very unexpected central bank decision or exchange blackout, etc. in 99.99% of the times market are perfectly functioning mechanism

 

[newtrader101]

Markets fail when liquidity drains or there is some rare event like very unexpected central bank decision or exchange blackout, etc. in 99.99% of the times market are perfectly functioning mechanism

That is it is not random, but...?