Shares/Stock Who are market makers?

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Market makers are financial professionals who facilitate trading by providing liquidity, or the ability to buy and sell stocks at any time. Market makers make money by charging a fee for each transaction they complete, usually called a "spread." Market makers have been around since the 1600s when the Dutch first began trading shares of the Dutch East India Company. Today, these professionals play an important role in ensuring that buyers and sellers can easily find each other on exchanges worldwide.

The market maker is a significant source of liquidity for the market because he or she is always prepared to buy or sell a stock at a given price. This provides a level of certainty that allows investors to buy or sell securities without having to worry about getting stuck with an illiquid security.

There are two types of market makers: internal and external. Internal market makers are employed by firms that operate as dealers or specialists on behalf of an exchange, they stand ready to buy and sell securities at publicly quoted prices while also making their own bids and offers based on their own analysis of the markets. External market makers provide liquidity by quoting bids and offers in securities traded outside any exchange (e.g., over-the-counter OTC).