Market Maker Activity And Price Movement by Samuel Ding
Can you predict the price movement of actively traded stocks based on the hedging activities of market makers? The results of these studies could help answer that question.
Peter Way, a veteran Chartered Financial Analyst (CFA), came up with an approach to predict the price movement of actively traded stocks based on the hedging activities of market makers. Between October 2009 and July 2016, he published several hundred articles providing forecasts of stock prices and his views of the market. One of the unique features in his forecasts is that he gives a price range with explicit downside exposure protection and time periods to achieve the targeted price.
Given that there was a good amount of data available, it will be interesting to take a close look at his forecasts and assess their performance from a third-party point of view ...