Explain the Concept of 'Economies of Scale' in Market Making ▴ Learn

Explain the Concept of ‘Economies of Scale’ in Market Making.

Economies of scale in market making mean that as the total volume of trades and the size of individual trades increase, the average cost per trade decreases. This is because the market maker's fixed costs (technology, salaries) are spread across a larger revenue base, leading to higher overall profitability and efficiency.

Explain the Relationship between Block Size and Transaction Throughput

How Does the ‘Peak Size’ Parameter of an Iceberg Order Influence Its Effectiveness?

How Can ‘Volume-Weighted Average Price’ (VWAP) Be Skewed by Wash Trading?

How Does Order Size Influence the Effective Spread Experienced by a Derivatives Trader?