Market maker

A market maker is a firm that continuously quotes both a price it is willing to buy a security at and a price it is willing to sell it at, providing liquidity so other investors can trade quickly without waiting for a matching buyer or seller to show up. Exchanges and brokers rely on market makers to keep trading smooth.

A market maker profits from the bid-ask spread, the small gap between its buy and sell price, collected many times over across a huge volume of trades. This is a different business model from investing, a market maker is not betting on where a stock is headed, it is profiting from facilitating trades themselves.