23

MARKET PULSE 

FEB-2018

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written approval of LankaBangla Securities Limited.

Market Makers in the Stock 

Market

A market maker is a "market participant" 
or member firm of an exchange that 
also buys and sells securities at prices 
it displays in an exchange’s trading 
system for its own account which are 
called principal trades and for customer 
accounts which are called agency trades. 
Using these systems, a market maker can 

enter and adjust quotes to buy or sell, 
enter, and execute orders, and clear those 
orders. Market makers exist under rules 
created by stock exchanges approved 
by a securities regulator. In the U.S., the 
Securities and Exchange Commission 
is the main regulator of the exchanges. 
Market maker rights and responsibilities 
vary by exchange, and the market within 
an exchange such as equities or options.

A market maker is a 

company that is always 

ready to buy or sell a 

financial asset at an openly 

quoted price on a long-

term basis. Market makers 

participate in transactions 

directly as either the seller 

or buyer.

Market maker are entities that 
provide both buy & sell quotes for 
others 

Essentially, market makers take the opposite side of investor trading volume for investor who want to buy  market 
makers will sale to them. For investors who want to sell, market makers will buy for them

Market makers, therefore, satisfy the supply & demand of the financial markets & keep securities changing hand between 
sellers & buyers.

Will sell 

@USD 110

Will buy 

@USD 100

Will sell 

@USD 110

Will buy 

@USD 100

Need to buy 

@USD 110

Ok... I sell 

@USD 110 

to you

Ok... I buy 

@USD 110 

from you

Forex market makers are large financial companies and banks whose transactions make up 

a significant portion of the total volume of Forex trading, giving them influence on currency 

exchange rates. Large international banks that trade currency worth tens of billions of U.S. 

dollars on a daily basis are usually referred to as market makers.