What is MARKET MAKER?

Broker, dealer, or investment firm that takes possession of, and trades in, a security as a principal, thereby assuming market and systemic risk. Continually quoting bid and offer prices, and guaranteeing full security sale or absorption at a specific price is a maker’s obligation. Their respective exchanges charge them lower-than-normal dealing fees for their services to the market after licensing them.

More On This Topic



Link to This Definition
Did you find this definition of MARKET MAKER helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary