market maker

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Market maker

Used in the context of general equities. One who maintains firm bid and offer prices in a given security by standing ready to buy or sell round lots at publicly quoted prices. See: Agent, dealer, specialist.

Market Maker

A dealer available to trade a stated security on its own account at any time at the quoted price. The job of a dealer is to be a market maker in order to promote liquidity for a security. When a broker-dealer makes a market, it trades from its own inventory, which is easier and less expensive for an investor than looking for other brokerages willing to trade. Many exchanges designate a market maker for each of its listed securities to promote ease of trade.

market maker

1. One (as a person or firm) that, on a continuous basis, buys and sells a security for one's own account. Market makers usually try to profit from a rapid turnover in security positions rather than from holding those positions in anticipation of gradual price movements. Specialists on the organized exchanges and dealers in the over-the-counter market are market makers. See also make a market.
2. A dealer in options on the floor of an options exchange who makes a market in one or more options. The Chicago Board Options Exchange uses market makers.

Market maker.

A broker-dealer who is prepared to buy or sell a specific security -- such as a bond or at least one round lot of a stock -- at a publicly quoted price, is called a market maker in that security.

Other brokers buy or sell specific securities through market makers, who may maintain inventories of those securities.

There is often more than one market maker in a particular security, and they bid against each other, helping to keep the marketplace liquid.

The Nasdaq Stock Market and the corporate and municipal bond markets are market maker markets. In contrast, on the floor of the New York Stock Exchange (NYSE) there's a single specialist to handle transactions in each security.

market maker

a firm attached to the STOCK MARKET which is engaged in the buying and selling of FINANCIAL SECURITIES such as STOCKS, SHARES and BONDS and thereby acts to establish a market PRICE for these securities. Market making firms in the UK have (since the 1986 stock market reforms) combined the roles of jobber (acting as a principal in the buying and selling of securities) and stockbroker (acting as an agent on behalf of clients wishing to sell or buy securities); although the stockbroking function is still performed by firms specialized in that activity alone.

A market making firm usually specializes in a small group of securities, for example the shares of companies in a particular industry The firm makes its profit out of the difference between the price at which it buys a security and the (higher) price at which it sells. The firm marks its buying and selling prices upwards or downwards according to whether its holding of a security is falling or increasing. For example, if there is a strong demand for a particular share, then as the firm sells some of its holdings it will mark the share price up to reflect its growing scarcity value. See BID PRICE, SHARE PURCHASE/SALE.

market maker

a firm attached to the STOCK EXCHANGE that is engaged in the buying and selling of FINANCIAL SECURITIES, such as STOCKS, SHARES and BONDS, and by so doing acts to establish a market for these securities. Market-making firms in the UK have (since the 1986 stock-market reforms) combined the roles of jobber (acting as aprincipal in the buying and selling of securities) and stockbroker (acting as an agent on behalf of clients wishing to sell or buy securities), although the stockbroking function is also still performed by firms specializing in that activity alone.

A market-making firm usually specializes in a small group of securities, for example, the shares of companies in a particular industry The firm makes its profit out of the difference between the ‘bid’ price at which it buys a security and the (higher) ‘offer’ price at which it sells. The firm marks its buying and selling prices upwards or downwards according to whether its holding of a security is falling or increasing. For example, if there is a strong demand for a particular share, then as the firm sells some of its holdings it will mark the share price up to reflect its growing security value. See BID PRICE, SHARE PURCHASE/SALE, DUAL CAPACITY, CHINESE WALL.

References in periodicals archive ?
The initial term of the market making agreement is one year, automatically renewed for additional one year periods, subject to certain customary termination rights as set forth in the market making agreement.
Quentin Chu, a Partner at Crestview, said, "This investment represents a compelling opportunity for Crestview to back a high quality management team with a strong market making platform and to benefit from the increasing electronification of trading across different asset classes.
The implemented solution will support Orient Securities' expanding market making operations in China.
8 million annually on technology to support options market making, while small firms spend an average $2.
Tbricks' market making fuses server-based auto-quoting and auto-hedging with fully configurable visualization in the front end, enabling firms to make markets with high performance and control.
Following receipt of the requisite TASE approval, IBI commenced its market making activities in the company's ordinary shares on March 4, 2014.
Additionally, Orc has made it possible to compete at a high level in the market making space by making it easy to handle my volatility skew, by automating the relationship between products and by automating hedging and value adjustments after a quote fill.
We have chosen Tbricks because of the advantage it gives us in terms of speed - a critical success factor in market making," says Jonathan Parkman, Co-Head of Agricultural Products Marex Spectron.
STOCKHOLM -- Orc, a leading provider of technology and services for the global financial industry, announced today that MXF Trading, a Chicago-based proprietary trading firm, will use Orc Market Maker for options market making on CME agricultural products.
Amsterdam-based market maker WEBB consolidates cash and derivatives trading and market making on a single, high-performance platform.
Combined with Orc Market Maker's high-performance market making logic, clients have been able to be among the fastest in the market in quoting options on the CME.
Amsterdam-based market maker Nino Options chooses Tbricks for market making and trading on Liffe Amsterdam/Euronext and Eurex.