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 ?
Today, the market makers exercised their right to purchase OR020934 GB for a total nominal amount of ISK 260m at a yield of 1.79%.
The Treasury's 10 market makers are the only ones that can access the tap facility, which is opened from 2 to 4 p.m.
MANAMA: Abu Dhabi Securities Exchange (ADX) has awarded Bahrain-based Sico with the first non-UAE licence making it the fifth registered market maker on the exchange.
The activity of HFT that does not function as a market maker is not aligned with an improvement in indicators of quality and at times is even aligned with a negative impact on themindicated, for example, in examining balanced HFT, algorithmic trading tools that do not change position at the end of the trading day compared with that of the previous day.
If investors are selling, market makers are supposed to keep buying, and vice versa.
In 2016, Shuaa helped Nasdaq Dubai to launch its single-stock futures market as founding market maker, said the statement from the company.
As market makers, National Treasurer Rosalia de Leon said the GSEDs would have the opportunity to access the Bond Sinking Fund.
These will serve as basis for future recognition of market makers. We have seen performance of GSEDs improve following the release of these report cards and the unveiling of the roadmap, through improved subscriptions, higher participation in pre-auction surveys, and more GSEDs providing indicative bids.
SumRidge Partners, LLC, (SumRidge) a top-ranked electronic fixed income market maker, has closed on a minority investment from funds managed by Stone Point Capital LLC (Stone Point), a private equity firm focused on investing in financial services businesses, the company said.
Most market makers calculate their own indicative values anyway, and if they recognize a discrepancy in an ETF's market price, they can easily make any minor adjustments necessary and ensure continued efficient trading.
NBAD originally secured the market maker's licence from the regulator in April 2014, a first for the Gulf region, but hadn't started operations officially until last Tuesday.
The Bahrain Bourse has approved regulations allowing margin trading and set up a framework for market makers in an effort to boost liquidity, it said on Tuesday.