Who are The MARKET MAKERS
#marketmakers #marketmaker #ETH_ETFs_Trading_Today #MarketWatchMay2024 #marketCrush Market makers are financial entities, typically banks or brokerage firms, that facilitate the trading of securities by providing liquidity to the markets. They do this by continuously buying and selling securities at publicly quoted prices. Here are some of the key roles and characteristics of market makers:
Liquidity Providers: Market makers ensure that there is enough volume on both sides of the market (buy and sell) to facilitate smooth trading, reducing the time it takes to buy or sell securities.
Bid-Ask Spread: They quote both a buy (bid) price and a sell (ask) price for securities, earning the difference between these prices, known as the spread, as profit.
Risk Management: Market makers must manage the risk of holding large positions in various securities, which they achieve through hedging strategies.
Regulatory Role: In many markets, market makers have specific obligations to maintain fair and orderly markets, often regulated by financial authorities.
Prominent examples of market makers include large financial institutions such as Goldman Sachs, Citadel Securities, Virtu Financial, and Morgan Stanley. They play a crucial role in ensuring market stability and efficiency.
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