Market making

Market making is a financial strategy where a firm or individual provides both buy and sell prices for a specific asset, like stocks or currencies, to facilitate trading. By doing so, they help ensure there’s always a market for that asset, which promotes liquidity. The market maker profits from the difference between the buying price (bid) and selling price (ask), known as the spread. Their role involves managing risk because asset prices can fluctuate, but their activity helps make markets more stable and efficient for other traders.