Market Maker
A "market maker" is a firm that stands ready to buy
and sell a particular stock on a regular and continuous basis
at a publicly quoted price. You'll most often hear about market
makers in the context of the Nasdaq or other "over the counter"
(OTC) markets. Market makers that stand ready to buy and sell
stocks listed on an exchange, such as the New York Stock Exchange,
are called "third market makers." Many OTC stocks have
more than one market-maker.
Market-makers generally must be ready to buy and sell at least
100 shares of a stock they make a market in. As a result, a large
order from an investor may have to be filled by a number of market-makers
at potentially different prices.
To learn more about the basics of trade execution, you should
read Trade Execution: What Every Investor
Should Know.
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