The London Stock Exchange has long been concerned that some market makers are not fulfilling their obligations. This study describes a range of tests designed to identify two types of fair weather market makers - client selection and market timing. These tests indicate that four market makers fir the expectations for client selection fair weather market makers. While the evidence supports the presence of fair weather market making, this behaviour seems to have little adverse effect on the market. It also discovered that market makers in a given stock all quote the same fixed spread in round pennies, and that this is about twice the touch, while leading market makers receive most of their business from in-house brokers.
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