market maker

Definition
A brokerage or bank that maintains a firm bid and ask price in a given security by standing ready, willing, and able to buy or sell at publicly quoted prices (called making a market). These firms display bid and offer prices for specific numbers of specific securities, and if these prices are met, they will immediately buy for or sell from their own accounts. Market makers are very important for maintaining liquidity and efficiency for the particular securities that they make markets in. At most firms, there is a strict separation of the market-making side and the brokerage side, since otherwise there might be an incentive for brokers to recommend securities simply because the firm makes a market in that security.




market maker is ...
... part of the
Brokerages subject.


Related Terms

specialist -  More
auction market -  More
best-execution requirement -
capital commitment, ghosting, inside market, inside spread, last-sale reporting, nominal quotation, passive market-making, real-time trade reporting, two-sided market, facilitation  and  


market maker appears in the definitions of these other terms on BusinessDictionary.com

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