OptionAutomator Options Trading Glossary:

Definition, Examples & Resources:Market Maker'

« Back to the Options Trading Glossary

What is Market Maker in Options Trading ?

Market Maker
A market maker is often times is also called a liquidity provider.  This is a trading company, or an independent trader, that quotes both a buy and a selling price in a stock held in inventory.  The intent is to profit from the difference between the bid and ask, or bid-offer spread. This increases availability of assets in the market, which is why the term liquidity provider is also used. A Designated Primary Market Maker (DPM) is a specialized market maker approved by the exchange to guarantee that he or she will take the position in a particular assigned security, option or option index. Adapted from:  Wikipedia.org

Thanks for sharing. Connect with us on social media for additional content!

Send this to a friend

Hi, this may be interesting you: Market Maker! This is the link: https://www.optionautomator.com/Options-Trading-Glossary/market-maker/