Today a friend mentioned a very good question. He said that among all financial roles, market makers are generally considered the most stable and lowest risk. Most of the time, they do not need to predict direction, they just need to provide liquidity to the market to earn high profits, which seems to be the safest "rental" position in the market. He wanted to apply this model to see if it could be effective.
However, my answer is absolutely not.
First, capital is a big issue; this scale is not something we retail investors can touch.
Second, wear and tear; market makers have a very high weight, and their wear and tear is much smaller than ours.
Third, risk resistance; market makers also cannot escape the fate of the big fish eating the small fish, because when a black swan event occurs, this part of the intermediaries also struggles to escape being crushed by those at a higher level. Ironically, those most professional, with the strongest capital and the strictest risk control, often suffer greater losses in extreme events than retail investors. This is not because they are not professional enough, but because their business model is destined to pay for systemic risk.
