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Market maker definition

Market maker

A dealer who regularly quotes both bid and ask prices and is ready to make a two-sided market for any financial product.

You may, for example, see a market maker that quotes $2.00 per share to buy 100 shares of a particular company and $2.05 per share to sell them. The maker earns their profit from the difference between the two (the spread).

Market makers are most typically seen on the equities markets. However, they can be found in other asset classes too.

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