Market Maker

Market maker is a broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares. Once an order is received, the market maker immediately sells from its own inventory or seeks an offsetting order. Market makers attempt to profit on the bid/ask spread, and by doing so keep the financial markets running efficiently because they are willing to quote both bid and offer prices for an asset.

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