This paper focuses on the role of scalpers as marketmakers in the competitive auction of futures exchanges. We use transactions data of a representative scalper to identify the source of scalper earnings. We find that scalpers provide liquidity services to incoming market orders, thereby facilitating commercial hedging. Scalper earnings are positively related to the bid‐asked spread and negatively related to the length of time a position is held.
No takes yet. Share an insight, caveat, or question.
William L. Silber (1984) studied this question.
Synapse has enriched 3 closely related papers on similar clinical questions. Consider them for comparative context: