Ads end in 20 seconds
This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Investment
Market Making
Providing liquidity by continuously quoting both buy and sell prices and profiting from the spread.
Market makers keep markets smooth and liquid. They take on risk by holding inventory but are compensated by the bid-ask spread. In modern markets, most market making is done by sophisticated algorithms rather than humans.
It's like being the guy at the currency exchange booth who always has both pounds and dollars ready and makes money on every swap.
Real world: In crypto, firms like Jane Street or Wintermute act as market makers on exchanges. They quote both buy and sell prices for Bitcoin and earn the tiny difference (spread) on thousands of trades per second.
💡 Market making is how professional firms earn steady profits by being the middleman in every trade.