What is a Market Maker?

Submitted by Share Trading on 22 August, 2012 - 21:42

In terms of the Australian stock market, a market maker is a broker who creates a simulated market, quoting both a buy and a sell price in a financial security, either a stock or a derivative (e.g. ASX instalments, forex dealers or certain CFD brokers). Market makers make their profit from the bid offer spread. Because marketmakers quote buy and sell simultaneously, they create liquidity in the market.

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