The Dojo

[$King]

How does a Market Maker make money?

A market maker makes money by buying stock at a lower price than the price at which they sell it, or selling the stock at a higher price than they buy it back. Ordinarily they can make money in both rising or falling markets, by taking advantage of the difference between "bid" and "offer" prices.

Market makers also receive liquidity rebates from electronic communication networks for each share that is sold to or purchased from each posted bid or offer.