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Running a Book and Jobbing Turns #FTSE #Trading

The Jobber needs to do two things. Run a strategic position and make prices that keep that position under control, while generating jobbing turns.

The position should not be too big compared to the units traded in, that is because we are trying to make money whether right or wrong about the direction the market is going in. So to do that the turns need to outweigh any loss on the position, over time, when wrong.

I think a starting rule of thumb is for the position to be about 3 times the size of the units traded in. We can adjust this depending upon the conditions.

Once our view (bull or bear) is decided on we need to apply it consistently, unless there is a really good reason not to. Otherwise we lose our strategy and end up just making minute to minute decisions. By keeping our strategy we know what we are trying to do and this helps us know what price to make. Still we need plenty of judgement, if we’re trying to sell how low our price needs to be to achieve it depends on the conditions and we can adjust how many we sell and how much we raise the price on selling depending on what we feel about the market.

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