Yajun Wang

Fearless Idea 27: Limit Market-Making Risks

Market makers have significant influence in financial markets, and they take on significant risk. In new research, Smith School professor Yajun Wang helps build a market-making model that enables market participants to better understand those risks. The model differs from traditional models because it allows market makers to explore how uninformed market participants might react to a change in a bid or ask price. The key is paying attention to information asymmetry. Read more...

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