Before revision:  By analyzing the optimal market making  problem using Markov Decision Processes , we provide simple conditions to determine when a market maker earns zero or positive profits and discuss economic implications.
After revision:  By analyzing the optimal market making problem using Markov Decision Processes . We provide explicit characterizations of the order value and the structure of the value functions. We use such characterizations to study when a market maker earns zero or positive profits and discuss economic implications.