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Market Maker Spread

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Market Maker Spread
The difference between the price at which a Market Maker is willing to buy a security and the price at which the firm is willing to sell it (the difference between the bid and ask for a given security). Since each market maker can either buy or sell a stock at any given time, the spread represents the market maker's profit on each trade.

Notes:
Market makers are limited as to the size of spread they offer. The bid/ask spread has a maximum size, this is to prevent cheating and manipulation of stock prices.



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