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Differences Between Speculators and Market Makers There are two main types of investors in the options market: speculators and market makers. They trade in different ways to make a profit. Speculators: Generally, investors who buy and sell a single option or create a trading strategy of multiple options in the market act as speculators. Speculators profit by successfully predicting movements in the price of an underlying asset over a period of time in the future, including an increase or decrease in the price of the underlying asset or the implied volatility (IV) of an option.Market Makers: Market makers are typically large financial institutions that have contractually agreed to provide liquidity (that is, providing both bids and asks) to the market by continuously buying and selling options simultaneously. Since options for an underlying asset generally have multiple expiration dates, each expiration date provides traders with multiple options for strike prices, and each strike price corresponds to a Call and a put option. Therefore, market makers need to quote a large number of options at the same time, which also provides liquidity to the market. This kind of market operation often requires strong risk tolerance, as well as the support of a large amount of funds, which is why market makers tend to be large financial institutions. Unlike speculators, market makers profit from the spread between the bids and asks of an option. The price difference between the mid-price and the bid-ask quotation can be regarded as a reward for market makers for providing liquidity services to the market. Because of the differences described above, speculators and market makers have different sensitivity to market prices. Speculators tend to seek greater profit between buying and selling on a single trade, while market makers are more concerned with how to profit from the bid-ask spread, such as the small differences between bid-ask prices on a large number of transactions. Market makers often need to manage complex and large positions, especially in the options market, which also makes market makers more sensitive to price than speculators. Option PricingIn the actual investment market, different types of investors don’t always play a singular role. When making quotations, market makers will not only take into account the underlying asset price and market volatility, but also their own holding positions and assessments of market movements. In bull and bear markets, market makers passively hold positions that oppose current market trends because they need to place buy orders and sell orders at the same time. For example, in a bull market, market maker quotes can be significantly skewed, resulting in higher ask prices for Call options and lower bids for Put options. As you can see, there’s a certain competitive relationship between speculators and market makers. The price of options will eventually be formed by the interaction of various factors of different market participants. TipTo learn more about options trading, and to more accurately assess trading opportunities, please refer to Introduction to Implied Volatility (IV) and USDC options....
Introduction to Implied Volatility (IV) In Options trading, traders are often exposed to a concept called volatility. In particular, they encounter implied volatility (IV), a term you can see on Bybit's Options Trading page. This articl...
Bybit Kazakhstan Spot Delisting MechanismBybit Kazakhstan will regularly review each token listed to ensure a healthy trading environment, thus protecting the rights and interests of traders. If a token fails to meet Bybit Kazakhstan's stringent listing requirements, the Bybit Kazakhstan team will conduct an in-depth review and may delist the token and its trading pair. Delisting ProcessOnce the token is delisted, the following situations may occur:1. Suspend some or all associated trading pairs;2. Suspend token deposits;3. Suspend token withdrawals. Before suspending withdrawals, users will have a buffer period to withdraw delisted tokens. If users fail to withdraw their delisted tokens before the given buffer period, Bybit Kazakhstan will exchange the delisted tokens for the equivalent USDT (according to the current market price) if market conditions permit. Please note that this exchange process is expected to take two to three weeks. Exchange Rules1. If there is sufficient liquidity in the over-the-counter (OTC) market after the token withdrawal is suspended, Bybit Kazakhstan will convert the delisted tokens into equivalent USDT at the market price, and distribute USDT to the user’s Unified Trading Account (UTA) proportionally after deducting transaction fees. 2. If there is insufficient liquidity in the OTC market after the suspension of withdrawals, no transactions will take place, and the value of the delisted tokens will become zero. Users will not be able to see delisted tokens in their accounts. 3. If the asset value after the delisted token is exchanged is less than 0.01 USDT, Bybit Kazakhstan will not release the converted USDT to users' Unified Trading Accounts (UTA). Notes:— Due to market fluctuations, users are advised to withdraw tokens in advance to avoid losses. — The withdrawal and exchange process takes time. Users are requested to be patient, and allow time to complete all processes.— Bybit Kazakhstan reserves the right to amend, change or cancel delistings at any time, and for any reasons, without prior notice. To learn more about Bybit Kazakhstan's Token Management Rules, please visit here....
FAQ — Block Trades (Partner with Paradigm)earn how to trade on Paradigm, please contact Paradigm’s 24/7 support.Which products are supported by Paradigm API trading?All Inverse Contracts — Perpetual and Futures, USDT Perpetual, USDC Perpe...
How to Register for a Testnet Account and Request for Test Coinsearn, with 100% replication of the product and services on the Bybit kazakhstan Mainnet. When real-world money is involved, people are a lot more cautious. Users on a mainnet are usually very wary of...
Types of Orders Available on Bybit kazakhstanearn maker fees and provide liquidity to the market. For more information, please refer to Post-Only Order. 4. Time in Force Selections (GTC, IOC and FOK) Time in Force (TIF) selections are in...
Differences Between the Margin Modes Under the Unified Trading AccountThe Unified Trading Account supports three (3) margin modes: Isolated Margin, Cross Margin, and Portfolio Margin.Please note that Cross Margin mode is the default setting. Read MoreTrading Rules: Liq...
Derivatives or Inverse Derivatives Accountsearn how to calculate unrealized P&L, please refer to the articles below.P&L Calculations (USDT Contract)P&L Calculations (Inverse Contracts)P&L This shows the P&L analysis for yo...
How to Get Started With Spot Tradingearn more about the difference between Spot and Spot Margin, please visit here. Place Your OrderBybit Kazakhstan Spot Trading provides you with various order types. To learn more about the diff...
FAQ — Individual KYCWhat is KYC?KYC (Know Your Customer) guidelines for financial services require that professionals make an effort to verify the identity, suitability and risks involved, in order to minimize the risk t...