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On
the NASDAQ system, a broker-dealer willing to accept the risk of holding
a particular number of shares of a particular security in order to
facilitate trading in that security.
Each Market Maker competes for customer order flow by displaying buy
and sell quotations for a guaranteed number of shares. Once an order
is received, the Market Maker will immediately sell from its own inventory,
or seek the other side of the trade until it is executed, this process
takes place in just seconds.
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There
are over 500 member firms that act as Nasdaq Market Makers. Market
makers keep the financial markets running efficient because they are
willing to quote both bid and offer prices for an asset. Some examples
of major market maker firms are J.P. Morgan, Etrade, and Lehman Bros. |
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Dictionary
