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Market maker

Market maker Bank or securities trading house that quotes binding buy and sell prices for a security.

Market makers guarantee that a security can be traded on an ongoing basis, thereby ensuring the liquidity and viability of the market. Through their readiness to step in as a counterparty at any time, market makers compensate for the inconsistent order flows of investors and stabilize the market when temporary imbalances occur. They are usually assigned to support trading in inactive stocks.

At FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange), market makers are known as Designated Sponsors.

 

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