Series 50: Market Making

Taken from our Series 50 Online Guide

Market Making

Market makers are dealers that assume the risk of buying or selling out of their own inventory at posted bid and ask prices. By doing so, they are creating a market for that security. Many municipal securities are traded through market makers, who provide liquidity and price discovery for buyers and sellers of that security. Market makers make most of their profits from the spread between bid and ask prices.

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