markkinatekijöistä

Markkinatekijät, known in English as market makers, are financial entities that simultaneously provide buy and sell quotes for a particular security or financial instrument. They stand ready to trade either side of the market, thereby adding liquidity and facilitating smoother trading for other participants. Market makers play a crucial role in efficient financial markets by narrowing the bid-ask spread, which is the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept. This reduction in spread lowers transaction costs for investors.

These entities typically operate on exchanges, in over-the-counter (OTC) markets, or in other trading venues. They profit from the bid-ask spread, aiming to buy low and sell high. To manage their risk, market makers often hedge their positions using other financial instruments. Their presence is vital for the continuous trading of many assets, ensuring that there is always a counterparty available for a trade, even if trading volumes are low. Regulators often monitor market maker activities to ensure fair and orderly markets. Without market makers, trading could become erratic and expensive, deterring many investors.