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Chickadee

08/04/09 4:29 PM

#30133 RE: happystock #30132

A market maker is a broker-dealer who stands ready to buy or sell shares of the stocks in which it makes a market. When a transaction is proposed, the market maker will give a price at which it would be willing to effect that transaction.

The more market makers there are in a given stock, the more likely they are to bid against each other, and the price will more likely move to a true "market" price.