Editorial review
Floor-era market-making intuition, still useful for spread economics
On Option Market Making · Allen Jan Baird · John Wiley & Sons
Published 24 March 2026
Pre-electronic lens on inventory, bid–ask, and spread risk—pedagogical colour, not a guide to modern screen markets.
Baird writes from the perspective of a professional liquidity provider when physical pits and early screens still dominated listed and commodity options. The book’s value on today’s shelf is explanatory: it shows why quotes widen, how inventory builds through one-sided flow, and why spread strategies are as much risk-management tools as directional bets.
The mathematics stays at a level accessible to motivated undergraduates and junior traders. Partial differential equations and modern stochastic control of market making are largely absent; readers should pair the title with Harris or contemporary microstructure sources if they need electronified venue detail.
Risk managers can use selected chapters to brief credit committees on dealer economics without leaning on caricature. Educators often assign short extracts alongside Natenberg so students hear a market-maker voice that predates co-located servers.
Technology examples, fee schedules, and venue references are dated by definition. Treat the work as classic intuition, not an operational handbook for 2020s wholesale electronic quoting.
This note is based on the catalogue metadata and the book’s longstanding place in options pedagogy, not on refreshed trade statistics.