Friday, May 05, 2023 6:31:53 PM
The original sponsoring MM for a new stock entering the OTC Markets gets a 30 day exclusive on that Stock. After that 30 days any qualified Market Maker can start Making a Market in that stock.
Market Makers are the middlemen that make a 10 second trade execution possible because you Buy from and Sell to a MM who will sell you shares at the quoted Ask or buy your shares at the quoted Bid. Without the MM as a middleman Trading would be excruciatingly slow as Sellers and Buyers were trying to be matched together.
"A market maker is a trader whose primary job is to create liquidity in the market by buying and selling securities. Market makers are always ready to buy and sell within the market at a publicly-quoted price. Usually, a market maker is a brokerage house, large bank, or other institution. However, it is possible for individuals to be market makers, as well."
"As the name suggests, market makers “create the market.” In other words, they create liquidity in the market by being readily available to buy and sell securities. This creates liquidity within the market. Most importantly, it helps other trades occur smoothly. Without market makers, the market would be relatively illiquid, which would prohibit the ease of trades."
"Here’s how it works: When you sell 5,000 shares of a particular stock, a market maker will purchase it from you at what’s called the bid price. Then, they’ll turn around and sell it to a buyer at the ask price. Market makers can then sell these purchased securities to broker-dealer firms within their exchange. Keep in mind that when market makers purchase securities, they don’t always have a buyer lined up right away."
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