Core Liquidity Provider


DEFINITION of 'Core Liquidity Provider'

An underwriter or a market maker that is a sizable holder of a given security or that facilitates the trading of the security. Core liquidity providers ideally bring greater price stability and distribute securities to both retail and institutional investors.

BREAKING DOWN 'Core Liquidity Provider'

Firms that underwrite or provide the financing for equity or debt transactions and then make a market or assist in the trading of these securities are said to be core liquidity providers. Without their assistance, the number of transactions in the security would decrease and the ability of buy- and sell-side firms to accumulate or dispose of stock would be diminished.

  1. Liquidity

    The degree to which an asset or security can be quickly bought ...
  2. Direct Market Access - DMA

    This refers to electronic facilities, often supplied by independent ...
  3. Liquidity Risk

    The risk stemming from the lack of marketability of an investment ...
  4. Institutional Investor

    A non-bank person or organization that trades securities in large ...
  5. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs ...
  6. Underwriting

    1. The process by which investment bankers raise investment capital ...
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