'Market Making' & 'Market Maker'
- Suppose one buyer is willing to buy a specific stock but there is no seller to complete his order. The reverse case may also occur in Stock Market.
- To sort out this real life situation, the concept of 'Market Making and Maket Maker' was introduced by SEBI (Securities and Exchange Board of India) in indian Stock Market.
- Market Maker is typically an institution which is appointed by Stock Exchange to increase and meet demand-supply of shares in Stock Market.
- The Market Maker places buy-and-sell call at the same time for a specific time period for a guaranteed number of shares.
- So, 'buy / sell' requirement of investor/trader is fulfilled by Market Maker's own holding or inventory of stocks.
- The Market Maker books profit by the difference between buy-call and sell-call placed by him.
- Suppose the Market Maker places a quote of Rs.500-450, which means that the Market Maker will buy stock at Rs.450/- and sell it at Rs.500/- and consequently, the Market Maker will earn a profit of =500 - 450 = Rs.50/-.
Example of Market Makers in Indian Stock Exchange :
- IDBI Capital Markets & Securities Ltd.
- Karvy Stock Broking Ltd.
- Quantum Global Securities Ltd.
- Etc............
Happy Investing !!!
প্রদীপ
## Common Investors may collect ebook from the following link for mastering the basics of investment :
### Govt Job Aspirants in Mechanical Engineering (Degree or Diploma) may collect ebook from the following link for cracking Competitive Exams :
https://pothi.com/pothi/book/ebook-er-pradip-mondal-solved-exam-papers-wbpsc-mechanical-engineering