Market maker (redirected from Market-maker)

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.

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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.

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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.