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46 thoughts on “What are 'market makers'? – MoneyWeek Investment Tutorials”

  • Michael Zischeck says:

    why would takers pay a higher fee than makers? and The liquidity we talk about, is it the asset being traded or FIAT? in terms of XRP, a bridge asset for x-border payments: would liquidity there mean FIAT liquidity or XRP liquidity or both?

  • Hello, I loved the video… very helpful! What are the market maker differences between NYSE (or some other big exchange) and the OTC market makers?

  • Where does MMs get their shares from? Say in a bull market no one if willing to sell their shares and there is a lot of buying power from investors. What happens when MMs sell all of their shares?

  • Okay, let's say I sold shares to market maker some shares at 100 price, he has to lock in profit and sell those shares to someone else at 120 right? But what if he's unable to? What of price suddenly crushes? Can market makers get losses or they always profit somehow?

  • So basically what your saying is the markets are a big casino and a complete scam… thanks for re-validating my thoughts.

  • How do market makers get their shares? Are they required to maintain a pool of some of the most illiquid shares on the exchange to provide liquidity? Do they sell naked shorts if you want to buy some shares that no market maker has?

  • The "spread" may be 20, but themarket maker's profit is not 20 but 10. It is 10 because the true market price is in between 100 and 120. So the actual market price is 110, but the ask price is 120, 10 profit. Likewise, the market price is 110, but the bid is 100. 10 loss for you, but 10 profit for the broker.

  • You are VERY good at making financial terms understandable to people without formal education.  I speak for everyone when I say we appreciate it, and hope you continue to put out videos

  • So, Why do people trade with market makers and not with 'No desk deal' model dealers? What are the advantages to trade with an Market maker?

  • so is a market maker a job, occupation, title, of a specific person or just someone willing to deal in the market?

  • Christopher Zylstra says:

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  • Prabhu Sundaram says:

    I am a big fan of your videos. Instead of putting them in a book, if you can put them in a DVD, I will buy it happily! Although I would appreciate if the DVD comes with more products like structured products, further elaboration on all of them (like the various bond types etc) and more examples in each video. Also if there are videos for banking processes like the back office processes, what treasury do and how it does what it does etc it would be great.

  • Thanks for the video, it's very helpful. I'm a little confused about how market makers deal with the risk posed by holding securities in inventory. Is it simply reflected in the spread offered?

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  • sometimes i see out of market trades? how is that possible?
    and why is it that i often see the same bid and ask numbers (like 176 stocks listed for dozens of time in the book) ?

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