Whatis a 'Market Maker' A market maker is a broker-dealer firm that assumes the risk of holding a certain number of shares of a particular security in order to facilitate the trading of that security. Each market maker competes for customer order flow by displaying buy and sell quotations for a guaranteed number of shares, and once an order is received from a buyer, the market maker immediately sells from its own inventory or seeks an offsetting order. The Nasdaq is the prime example of an operation of market makers, given that there are more than 500 member firms that act as Nasdaq market makers, keeping the financial markets running efficiently.
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