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Market Makers

June 26th, 2009
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Market Makers
Every minute of the stock market, the Market Makers stand ready to buy and sell shares from brokers, allowing investors to buy and sell their shares quickly.  Market Makers are the firms that accept the risk of offering both the buy and sell prices for shares. Market Makers compete for customer orders by providing the buy and sell for a guaranteed amount of shares. They often will buy shares without already having a buyer lined up. Once the Market Maker sells from their inventory they proceed to make an offsetting order to replenish their supplies of the stock. They are responsible for ensuring liquidity in the market and preventing excess volatility.

The Market Makers make their money by managing the buy and sell spread.  While there may only be a small difference in the sell and buy price, when millions of shares are trading this small difference can add up to a sizable profit.

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Picksthatmove.com is an independent electronic publication that provides information on selected publicly traded companies.  Picksthatmove.com is not a registered investment advisor or broker-dealer.  Picksthatmove.com’s affiliates, officers, directors and employees may buy and sell shares in any company mentioned herein and may profit in the event those shares rise in value. Please do your own Due Diligence before investing in any of the stocks mentioned above. 

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Jun
26
2009


One Response to “Market Makers”

  1. Allen Taylor Says:

    Nice writing. You are on my RSS reader now so I can read more from you down the road.

    Allen Taylor