Monday, January 3, 2011

Market Maker

A market maker is a firm or individual who is tasked with maintaining a buy and sell order at all times. Their profit is the difference between the buy and sell prices (the bid-ask spread). Some market makers will be contractually obligated by the exchange to provide two-way quotes at all times. The fund management company is, in effect, the market maker when it comes to buying and selling units or shares in a mutual fund.

Synonyms: Specialist, Dealer, Broker/Dealer, Middleman

If you have any further questions or would like to add to this fund management term, then please submit your thoughts below.

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