An Analysis of Topical Issue in Today’s Financial Markets

Ning Wang ()
Additional contact information
Ning Wang: The University of Sydney

A chapter in Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023), 2023, pp 528-534 from Springer

Abstract: Abstract This report delves into a contemporary concern within the financial market, namely, the challenges faced by dealers, also known as market makers, in today’s financial landscape. The primary objective of this report is to critically examine the value that dealers bring to the market and their true capacity to provide liquidity. Additionally, it conducts an in-depth analysis of the principal factors influencing short-term volatility. Market makers, or dealers, play a pivotal role in fostering liquidity within the financial market and contribute significantly to its long-term growth trajectory. Their adeptness at managing market risks empowers them to continue trading even during periods of market downturns, consequently enhancing the overall attractiveness and liquidity of the market. However, it is imperative to scrutinize whether dealers, driven by profit maximization, may sometimes prioritize personal gain at the expense of their liquidity-providing role. Furthermore, it is noteworthy that the underlying assets in stock markets and commodity markets are fundamentally distinct, leading to disparate causes of volatility in these two domains. On the other hand, there exist common determinants that transcend asset types, such as inflation trends, short-term interest rates, and market sentiment. These factors serve as crucial elements for forecasting short-term volatility in both equities and commodities markets, exerting an identical influence on these distinct market segments.

Keywords: dealers; market maker; liquidity; volatility; stock market; commodity market; inflation; interest rate (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-298-9_57

Ordering information: This item can be ordered from
http://www.springer.com/9789464632989

DOI: 10.2991/978-94-6463-298-9_57

Access Statistics for this chapter

More chapters in Advances in Economics, Business and Management Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().