MMs trade like bookies at the track. They might give short odds on the favorite, or they may give you good odds if they think the favorite cant win.
They invite you to take a position against them, but the odds are rigged in their favor. Sometimes they get it wrong, like the rest of us. Some are also mechanical with autoquotes, but those are also rigged, and are not balanced in IV levels for puts and calls. Sometimes they just want to offset a large position that they sold, and they make quotes cheap, to balance the books.
Amongst all this, are the 'non MM' buyers and sellers, making normal trades. The MMs look to exploit these guys, and to not trade against other MMs. Thats why eto players should track the IV of the last sale, and not the bid/ask spread. Fair val is what someone paid, not what someone is asking.
Knowing where fair val is now, compared to where it has been is essential. Its tough enough trying to beat commissions and spreads as it is.
