|
Market Makers A-Z List:
A -
B -
C -
D -
E -
F -
G -
H -
I -
J -
K -
L -
M -
N -
O -
P -
Q -
R -
S -
T -
U -
V -
W -
XYZ
|
Market Makers:
Info: Legend: M = Market Maker, O = Order Entry Firm, C = ECN, E = Exchange, P = Service Desk Participant, N = Non-Member
A market maker is a firm who quotes both a buy and a sell price in a financial instrument or commodity, hoping to make a profit on the turn or the bid/offer spread.
In foreign exchange trading, where most deals are conducted Over-the-Counter and are, therefore, completely virtual, the market maker sells to and buys from its clients. Hence, the client's loss and the spread is the market-maker firm's profit, which gets thus compensated for the effort of providing liquidity in a competitive market. This extra liquidity reduces transaction costs and therefore facilitates trades for the clients, who would otherwise have to accept a worse price or even not be able to trade at all. Most foreign exchange trading firms are market makers and so are many banks, although not in all currency markets.
Most stock exchanges operate on a matched bargain or order driven basis. In such a system there are no designated or official market makers, but market makers nevertheless exist. When a buyer's bid meets a seller's offer or vice versa, the stock exchange's matching system will decide that a deal has been executed.
In the United States, the New York Stock Exchange (NYSE) and American Stock Exchange (AMEX), among others, have a single exchange member, known as the "specialist," who acts as the official market maker for a given security. In return for a) providing a required amount of liquidity to the security's market, b) taking the other side of trades when there are short-term buy-and-sell-side imbalances in customer orders, and c) attempting to prevent excess volatility, the specialist is granted various informational and trade execution advantages.
Other U.S. exchanges, most prominently the NASDAQ Stock Exchange, employ several competing official market makers in a security. These market makers are required to maintain two-sided markets during exchange hours and are obligated to buy and sell at their displayed bids and offers. In most situations, only official market makers are permitted to engage in naked shorting.
On the London Stock Exchange (LSE) there are official market makers for many securities (but not for shares in the largest and most heavily traded companies, which instead use an automated system called TradElect). It is their prices which are displayed on the Stock Exchange Automated Quotation system, and it is with them that ordinary stockbrokers generally have to deal when buying or selling stock on behalf of their clients.
Proponents of the official market making system claim market makers add to the liquidity and depth of the market by taking a short or long position for a time, thus assuming some risk, in return for hopefully making a small profit. On the LSE one can always buy and sell stock: each stock always has at least two market makers and they are obliged to deal.
This contrasts with some of the smaller order driven markets. Unofficial market makers are free to operate on order driven markets or, indeed, on the LSE.
|
|
Stock Market - Market Makers Info:
|
|
|
 Level II Stock Quotes - If you are using Level II Stock Quotes, you can find out who the Market Makers are - View the market maker buying or selling the stock you are watching, and how many shares are bought and sold. Each market maker represents a buyer or seller in the stock market. Market makers try to keep the spread between the BID and ASK price tight so more market makers will trade with them and in turn they will make more money, because the cost for a MM to buy a seat on the stock exchange can be overwhelming and cost up to $4 Million dollars. If the market maker leases a seat on the exchange it will cost up to $55,000 per month. So the MMs need to make thousands of trades each month to pay those costs and they need to be as fair as they can, otherwise no one will trade with them. |
