In a way they are not interested in the fundamentals, as long as the share price is moving around they can job the stock and pick up the jobber's turn (the spread). It is kind of hedging their positions all the time, bit like a bookmaker (if his potential pay out becomes un-manageable he will start to lay off bets with another bookmaker).
There are IBD (Inter Broker Dealers) who trade in the middle of MMs.
MMs will have a list of potential buyers and sellers at different levels. Say the price is 100-110 and they have sellers at 102. If a broker comes on with a buyer either at best or at a limit between 104 and 110 then they will offer the stock indicatively, then go on to the seller (102) and firm the deal up. There is also a term known as a 'protected trade'. See below.
You must also appreciate that there are many different sources of a quote (talking UK here) such as Level2, MMs telephone price (and size), RSPs (Retail Service Providers) and (although not obtainable by you and me) the dark pools or MTFs and SIs (Systematic Internalisers--honestly!)
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I read "flash boys", just wanted to know if there are any books available on how market makers determine the price of stocks? How price move so up and down? Why poor scripts like netflix get prices so high??? etc..
