What is a 'One-Man Picture'

A one-man picture is a situation in which the bid quote and ask quote for a security is provided by a single brokerage. The difference, called the bid-ask spread, is kept as profit by the brokerage. The term is a somewhat obscure reference to the way market makers influence securities pricing.

BREAKING DOWN 'One-Man Picture'

One-man pictures happen fairly infrequently in securities trading. All securities, including stocks, bonds, foreign currencies and commodities, have two prices: the bid and the ask. The bid is what a buyer is willing to pay for a security; the ask what a seller is willing to take. It’s akin to an antique or art auction, with buyers and sellers constantly negotiating and positioning until a final price is reached. In auctions, the final price means the item has sold and is removed from the auction floor; in financial markets, when the bid and the ask reach the same point, a trade happens and the security disappears from the market.

Of course, unlike an art auction, tens of thousands of identical securities typically trade every minute, so the spread between the ask and the bid is fluid, varying constantly according to supply and demand. Some large brokerages, called market makers, are able to set both the bid and ask price of a particular security. To use the analogy of an auction again, this is like the opening bid set by an auction house. By quoting both the bid and ask price, market makers are able to “paint” the buying options for investors. This is possible because they control enough volume of the security to influence the market.

A One Man Picture Controls Supply and Demand

Market makers are able to control both the bid and ask by trading large blocks of a security. For example, if someone buys all the available shares of a company at the current ask price of $91.22 per share, then the ask price automatically shifts to the next offer of $91.23. When those sell out, the ask becomes $91.24, and so on. This can also work in reverse, in which more of the shares become available than anyone wishes to buy at a certain bid price. In that case the bid price reverts to the next lower price, until someone buys all the shares at that price. Now imagine if a large brokerage buys all the available shares at the ask price. That price in effect becomes the new bid price. Thus the brokerage has effectively set both the bid and ask price; it is able to “make the market” and keep whatever spread is generated during the trades.

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