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 ?
Market makers profit through the market maker spread, not by betting on the direction of the security's price.
The Market Maker Workshop was divided into five different sessions all with the aim of providing insights and an overview on what a market maker is.
Al Balooshi reiterated "Having a market maker will further strengthen ADX's unique listing and trading experience where liquidity providers and market participants meet to trade in ADX listed companies in an open, transparent and fair marketplace.
It has been suggested that market makers failed to provide liquidity on 6 May, subsequently exacerbating the decline.
V] of a particular quote status x is defined as the percentage of buy volumes minus that of sell volumes during the time of which the quote status of the market maker is x.
So if the price goes above the cap, the market maker pays you.
88-11, a lender should determine a normal servicing fee rate for SBA loans in the absence of a major secondary market maker.
Additionally, over the past few months, Orc has dramatically improved the performance of its CME Group market gateway, specifically optimized for mass quoting with Orc Market Maker.
Rashed Al Balooshi, said, "One of the significant benefits of having a market-maker in stock exchanges is their commitment to provide bid and offer prices in all market conditions, which ensures there is always a price at which investors can buy and sell in their stocks with the involvement of a market maker.
The Market-Wide Speed Bump is activated automatically if these thresholds are breached for multiple products within a specified time period, and all quotes for that market maker are then inactivated.
Orc Market Maker combines superior performance with rich off-the-shelf functionality.
Market Maker obligations - Each market maker will be obligated to quote bid and ask prices on Puts and Calls options on each of the 4 shares (Teva, ICL, Leumi and Poalim), within the guidelines stipulated by the TASE Board of Directors.