When a MM is on the bid and ask........ he is not holding shares.... he doesnt have to. Everything that is being sold and being bought is handled by the MM. he is already cleaning house on the spread on every transaction.
MMs typically wont take a position.... because they are not in the business of speculating on stock.......... they only business is matching orders and creating liquidity.
- However if they do.. they will do because the spread is big enough that they could cover quickly if needed..... or there is sudden surge of buying or selling where the MM can move in and move out over the course of several hours...
Its like saying that VEGAS takes a position on a sports event........ no they dont. Vegas ( House) only makes money on the spread . Bettor A bets $11 to win back $10.00 better B bets $11 to Win back $10. 2 bettors paid $22 to Vegas... and the payout is $20..... Vegas always wins the $2.00 spread. It doesnt matter which team wins!!!!!!!!!!!!!!! Vegas is not going to take the $2.00 and bet on a team they think will win..... they let the suckers do that.
VEgas will MOVE the lines ---- just like MMs move the bid/ask when there is an unbalance on either direction....trying to balance the betting/trades as close to 50% as possible.
