Market Maker

Market Terms

We don't know everything about the markets.  We're just devoted to learning.  Taken from those smarter than ourselves, here's how we define Market Maker.

A market participant or member of a firm or exchange that also buys and sells securities for its own account at prices it displays in its exchanges own trading system.  The objective of the market maker is to profit from the bid-ask spread, or the amount the ask price exceeds the bid price of a market asset.  The most common form of market maker is a brokerage house.  They provide purchase and sale solutions for investors in an effort to keep financial markets liquid.  Market makers display buy and sell order quotes for a guaranteed number of shares, and once an order is received from a buyer, the market maker immediately sells off their position from their own inventory.