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 ?
To assist in Kuwait's economic growth, it is essential that Boursa Kuwait adopts market making initiatives to transform the nation into a regional hub for trade, investment, and commerce, a statement said.
Baader Bank, with its headquarters in Unterschleissheim, near Munich, employs around 450 personnel supporting customers and their needs across the business areas of Market Making, Capital Markets, Institutional Brokerage, Asset Management Services, Banking Services and Research.
A spokesman for the QSE said that carrying out the market making activities by licensed financial services firms was expected to begin in the second half of the current year.
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The paper was disclosed on the bourse's website to receive the views and opinions of market participants, prior to the implementation of the market making rules and guidelines.
The paper was disclosed on the bourse's website in order to receive the views and opinions of Bahrain Bourse Market Participants, prior to the implementation of the Market Making Rules and Guidelines.
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.
Beltone Market Maker will offer simultaneous bid and offer prices in selected securities listed on Nasdaq Dubai as part of its market making services, to support liquidity, attractive pricing, and active trading by investors.
Short-selling he was an important tool market making needs to provide liquidity, so when a market is going up, and "we don't have an inventory, we will sell-short to provide to a buyer.
The vendor added that the move, which serves its plan for strategic repositioning and de-risking of the markets division, was seen to transfer risk management of, and/or market making for, up to GBP15bn (USD25bn/EUR18.
NORDIC BUSINESS REPORT-April 10, 2013-Orca[euro](tm)s market making solution selected by BRED Banque Populaire(C)2013 M2 COMMUNICATIONS http://www.
According to new TABB research, "US Options Market Making 2013: Scale, Scope and Survival," written by Andy Nybo, a principal and head of derivatives, structural shifts in the US equity options markets are forcing these firms to invest continually in technology to support the complexity of providing liquidity across a fragmented exchange landscape.