Market maker

A market maker quotes both a bid and an ask continuously, earning the spread in exchange for supplying immediacy. Market making involves constant order placement and cancellation, which is why high cancellation rates alone prove nothing about manipulation.

market microstructure · updated 2026-11-06

See also

• Adverse selection — Adverse selection is the risk that the counterparty who trades against your resting order knows something you do not. Market maker…
• Bid-ask spread — The bid-ask spread is the difference between the best bid and the best ask. It is the immediate cost of trading in and straight ba…
• Liquidity — Liquidity is the ability to trade a meaningful size quickly without moving the price much. It is not a single number: it combines …

Terms that refer here

Adverse selection · Bid-ask spread · High-frequency trading · Market manipulation as a service

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