As for you cerhob.....you've got to be joking if you think that a 5c spread is a proper spread for any warrant in most situations and it is completely outrageous for RIOWGJ.
Sure, I can do as you suggest and bid higher/lower than the MM buying/selling price, but one of the points I am making is an important one which carries on from previous posts in this thread.
That is, if you were to buy RIOWGJ at 57c for example, you are already asking the underlying share to move by an enormous amount before the MM raises their buying price from 52c to 57c and before you can even begin looking at selling the warrant back to the MM at break even.
If the buy/selling spread is better priced, you could perhaps buy RIOWGJ at say 57c (MM selling price) which might sit, say, only 1c away from a more appropriate MM buying price of 56c for example. If this was the case, (as SG has suggested at their warrant course is their preferred option), then the equivalent rise in the underlying share price which would have seen the original MM buying price of 52c rise to 57c (to allow you to break even in real life), would now translate into my suggested MM buying price of 56c rising to 61c with the new MM selling price sitting at 62c.
In this hypothetical example cerhob, I hope it becomes quite clear as to how the MM is preventing traders from cashing in on a potential 5c rise in the warrant (56c to 61c) by making the spread ridiculously too far apart. It is obvious that with a 5c spread, no warrant trader with any experience is going to touch RIOWGJ and this, I suspect is exactly what SG are trying to do at the moment.
For what reason? I don't know. All I know is that if you buy RIOWGJ 5c higher than the prevailing buy price on offer by the MM when there is no other players in the market, then you still may not make a profit even if the underlying rises exactly as you had suspected. In other words, the MM doesn't want to pay up to a client who picked the right move in the market.
Previous posters have also noted such shannanigans going on with MM's.
