InsiderFlow › Glossary › What is a market maker?
A market maker is the operator continuously quoting buy and sell prices, ensuring there's always a counterparty: the market's lubricant.
Firms like Citadel Securities or Virtu quote bid and ask simultaneously on thousands of securities, earning the spread. Without them, buying or selling a thinly traded stock could take hours or move the price 5%.
The model gets controversial where it meets "payment for order flow": zero-commission brokers sell their retail orders to market makers, who execute them internally. Retail pays zero commissions, but execution price quality remains a matter of regulatory debate.
On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.
They're among the most regulated players; the debate concerns payment-for-order-flow conflicts of interest, if anything.
By collecting the spread thousands of times per second across millions of trades: pennies at a time, on gigantic volume.