What is a market maker?

A market maker is an undertaking to hold a specific securities the risk so that investors can trade in the security of the individual or organization. They make buy and sell quotations for the corresponding products in order for investors to trade.

Where have you heard of market makers?

You may have heard of market makers when it comes to market trading. Sometimes, regulators such as the Federal Reserve investigate how market makers make money. For example, two trading firms were accused of offering unfavorable trades to clients.

What you need to know about market makers...

Market makers perform to keep the market liquidity functions. Although they may be individuals, the size of the investment required to enable traders to buy and sell securities means that they are typically large brokerage firms. Currency trading often involves market makers, usually banks and foreign exchange trading companies. Customers buy and sell to market makers.