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Define: Market Makers



Market makers are individuals or corporations that are charged with the responsibility of creating markets and maintaining liquidity in the options market.

In fact, when you buy or sell options, you are doing so with a market maker and not with another investor. This is how the market maker system maintains liquidity in the options market. Without market makers, it might often be impossible to sell options that you own due to not having another investor on the other side asking for the same options contract at the same time.

Read the full tutorial on Market Makers.