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Market Maker Definition

Learn the definition of market maker and other ETF terminology from the etf.com glossary.

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By ETF Glossary
Dec 04, 2023
Edited by: etf.com Staff
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Learn more about Market Makers

Market makers play a crucial role in the liquidity and smooth functioning of ETFs. These financial intermediaries facilitate trading by constantly quoting bid and ask prices for ETF shares. By providing a market for buyers and sellers, market makers enhance the efficiency of ETF transactions on the exchange. Their ability to swiftly buy or sell ETF shares helps maintain stable prices, reducing bid-ask spreads and minimizing the impact of large trades on the ETF's market value. In essence, market makers contribute to the overall market health and ensure that investors can readily buy or sell ETF shares at prevailing market prices.

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ETF Glossary

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock… View Bio

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