Market Maker Responsibilities - Introduction

In addition to the requirements to become a market maker, firms must follow strict guide- lines when acting as a market maker. Market makers must adhere to all rules relating to their participation in the over the counter market. Entering quotes, executing orders, and operating as a market maker during an offering are just some of the activities that have very specific standards of operation. All Series 55 candidates must have an in-depth understanding of market maker rules and regulations in order to successfully complete the Series 55 Exam.



Times For Entering A Quote


Related Articles
  1. Professionals

    Market Maker Responsibilities

    Series 55
  2. Retirement

    Electronic Trading: The Role of a Market Maker

    Market makers compete for customer order flows by displaying buy and sell quotations for a guaranteed number of shares. The difference between the price at which a market maker is willing to ...
  3. Professionals

    Firm Quote Rule

    SEC Rule 11Ac1-1 states that all market makers who publish quotes over the NASDAQ system must execute an order that is presented to the firm, at a price and size that is at least equal to its ...
  4. Professionals

    Piggybacking A Quote

    If an OTC BB security has been quoted by another dealer for a minimum of 30 days, they may simply enter their own quote by piggybacking the current dealer’s quote so long as: The security ...
  5. Professionals

    Withdrawing Quotes

    There are two ways that a market maker may withdraw their quotes for a security. A market maker may withdraw their quotes either on a voluntary basis or on an excused basis. If a market maker ...
  6. Professionals

    D. NASDAQ

    Securities that are not listed a centralized exchange trade over the counter or on the NASDAQ. NASDAQ stands for National Association of Securities Dealers Automated Quotation System. It is the ...
  7. Retirement

    Electronic Trading: Level I, II and III Access

    There are a variety of ways in which Nasdaq quotes security prices to the public. These levels vary on the amount of information and access they provide to investors. Level I This type of quote ...
  8. Forex Education

    Market Makers Vs. Electronic Communications Networks

    Learn the pros and cons of trading forex through these two types of brokers.
  9. Forex Education

    1. Find A Good Broker

    Thanks to the resources available to aspiring traders, getting into FX is now easier than ever.
  10. Professionals

    Dominated And Controlled Markets

    FINRA’s 5% mark up policy is a guideline for charging mark ups and commissions for transactions in securities with active and competitive markets. Some small OTC securities do not have ...
RELATED TERMS
  1. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
  2. Indicative Quote

    In forex trading, a currency quote that is provided by a market ...
  3. Trade Or Fade Rule

    An options exchange rule that requires the market maker to either ...
  4. Real-Time Trade Reporting

    A requirement imposed on market makers (and in some instances, ...
  5. Third Market Maker

    A third-party securities dealer that is ready and willing to ...
  6. Normal Market Size

    A share classification structure based on the number of shares ...
RELATED FAQS
  1. What is the difference between a broker and a market maker?

    A broker is an intermediary who has a license to buy and sell securities on a client's behalf. Stockbrokers coordinate contracts ... Read Answer >>
  2. What's the difference between a Nasdaq market maker and a NYSE specialist?

    What's the main difference between a specialist and a market maker? Not much. Both the New York Stock Exchange (NYSE) specialist ... Read Answer >>
  3. A person purchases stock XYZ (an Over The Counter stock) from a company who is also ...

    The correct answer is c When the firm is a market maker in the stock then it must act as a principle. Principal is the main ... Read Answer >>
  4. What is the difference between a quote driven market and an order driven one?

    The difference between these two market systems lies in what is displayed in the market in terms of orders and bid and ask ... Read Answer >>
  5. Is an earnings surprise priced into the opening value by market makers or does the ...

    An earnings surprise is an event where the earnings of a company are greater or lower than the predictions put forth by analysts, ... Read Answer >>
  6. What are the steps to get a company listed on the OTCBB?

    The over-the-counter bulletin board (OTCBB) is a regulated quotation service for over-the-counter (OTC) securities. The securities ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center