Make A Market

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Dictionary Says

Definition of 'Make A Market'

An action whereby a dealer stands by ready, willing and able to buy or sell a particular security at the quoted bid and ask price.
Investopedia Says

Investopedia explains 'Make A Market'

By being able to make a market allows the brokerage to fill customer orders out of the brokerage inventory, which is faster and easier than filling orders from other brokerages or investors.

Related Definitions

  • Broker-Dealer

    A person or firm in the business of buying and selling securities operating as both a broker and a dealer depending on the transaction.
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  • Liquidity

    1. The degree to which an asset or security can be bought or sold in the market without affecting the asset's price. Liquidity is characterized by a high level of trading activity. ...
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  • Market Maker

    A broker-dealer firm that accepts the risk of holding a certain number of shares of a particular security in order to facilitate trading in that security. Each market maker competes for ...
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    • Specialist

      A member of an exchange who acts as the market maker to facilitate the trading of a given stock. The specialist holds an inventory of the stock, posts the bid and ask prices, manages ...
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    • Exchange

      A marketplace in which securities, commodities, derivatives and other financial instruments are traded. The core function of an exchange - such as a stock exchange - is to ensure fair ...
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    • Over-The-Counter - OTC

      A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" can be used to refer to stocks that trade via a dealer ...
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    • Quote

      1. The last price at which a security or commodity traded, meaning the most recent price on which a buyer and seller agreed and at which some amount of the asset was transacted. 2. The ...
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    • Ask

      The price a seller is willing to accept for a security, also known as the offer price. Along with the price, the ask quote will generally also stipulate the amount of the security ...
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    • Bid

      1. An offer made by an investor, a trader or a dealer to buy a security. The bid will stipulate both the price at which the buyer is willing to purchase the security and the quantity to ...
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