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Market makers are
the big players that 'make a market' stock trading various
stocks and other instruments. Market makers, like major banks
and other financial institutions, make their cash stock trading
for their clients, and also stock trading on their own accounts
(in other words stock trading on a VERY big scale). Market
makers have a legal and contractual obligation to take orders
for all the stocks they make a market for - this is essential
to preserve market liquidity, without which, the whole stock
market would just be one giant lottery. Market makers can
process extremely big orders, although they will normally
try to introduce these giant orders drip by drip into the
market in order not to reveal their strategy. The giant and
famous firms of Goldman Sachs, JP Morgan and Morgan Stanley
are obvious examples of stock trading market makers. From
time to time in your stock trading, you will hear stories
that market makers 'run' the markets. This is nonsense, even
the very largest market maker has nowhere near the stock trading
liquidity or asset base required to move a market in any except
the tiniest of stocks (and you NEVER try stock trading 'tiddlers'
or 'penny stocks', do you?!). Remember - the Grail tells you
that your target stock must be liquid.
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