Pro lesson, preview locked
Unlock the full video and walkthrough with FinanceFlow Pro.
5:00Market Makers: Who Is on the Other Side of Your Trade
You hit "buy 10 shares" on your phone and it fills instantly, often at a price better than the screen showed. There was no other investor on the other side. A market maker was, and it paid your broker for the privilege.
When you place a small market order, the counterparty is almost never another retail investor. It is a market maker, a firm that continuously quotes a price to *buy* (the bid) and a price to *sell* (the ask), standing ready to take the other side of your trade at any moment. The gap between those two prices is the bid-ask spread, and capturing it is the core of how a market maker earns a living.
Unlock the full lesson with Pro
The complete walkthrough, rail map and quiz for Market Makers: Who Is on the Other Side of Your Trade, plus every Pro lesson in the library.