Angie · learn
Market maker
A firm that continuously quotes both a buy and a sell price, so there is always someone on the other side. It earns the spread for taking that risk.
Updated 2026-09-05
A market maker quotes both a price it will buy at and a price it will sell at, continuously, and stands ready to trade at both. It exists so that there is always someone on the other side of your order.
It is paid for that service by the bid-ask spread, which is compensation for genuine risk: it may be buying from someone who knows something it does not. That is why the spread widens on illiquid names and during volatile moments, which are exactly the times you are most likely to need it.
See also
- Bid-ask spread — The gap between the highest price a buyer will pay and the lowest a seller will accept. It is the cost of trading, and you pay half of it on the way in and half on the way out.
- Liquidity — How easily something can be sold near its quoted price. A liquid stock absorbs your order; an illiquid one moves against you as you fill it.
- Secondary market — Trading between investors, which is what an exchange is. The company receives nothing when its shares change hands here.
Educational content, not investment advice. Angie explains how a valuation is built so you can judge it yourself. What you do with that is your call.
