Glossary
Market Maker
A firm that continuously quotes both a buy and a sell price, providing liquidity.
A market maker is a firm — often a bank or specialist trading firm — that continuously quotes both a bid and an ask on a security, standing ready to buy from sellers and sell to buyers at the quoted prices.
Market makers earn the bid-ask spread on each round trip and provide the liquidity that allows orders to execute instantly during market hours. Exchanges grant them rebates or designated-market-maker privileges in exchange.
Modern equity market making is dominated by high-frequency firms (Citadel Securities, Virtu, Jane Street) that quote across thousands of names with millisecond-scale risk management and automated inventory hedging.