Market maker
markets · trading
A market maker quotes buy and sell prices to provide liquidity, earning the spread and/or incentives.
- Also known as
- liquidity provider, mm
1.concept
Market makers post resting orders on both sides of the book, tightening spreads and improving execution for other participants. They manage inventory and hedging to control risk.
2.fees
Exchanges often offer maker rebates and lower fees to encourage liquidity provision, while takers pay higher fees for immediate execution.
Related terms
Liquidity
→How easily an asset can be bought or sold in size without causing a large price move.
finance · trading
Bid-Ask Spread
→The difference between the highest bid and lowest ask price for an asset.
trading
Limit Order
→An order to buy or sell an asset at a specified price or better, without guaranteeing execution.
trading
All terms and definitions may update as the Cryptionary improves.