Market Maker

Market Makers are intermediaries that keep financial markets liquid; they facilitate the trading of securities by holding large volumes of the securities and setting guaranteed prices at which traders can buy (i.e., offer prices) or sell (bid prices) securities. Market Makers earn profits by maintaining a spread between the price for which shares of securities are bought and sold. For instance, if a Market Maker purchases a security share for $20 and sells the same security for $25, the Market Maker has earned $5.