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What is the Role of a Market Maker?

A Market Maker is a firm specialized in providing liquidity and depth to markets. Their main activity consists in assuming a two-sided position, quoting both bid and ask prices, which means they can be acting as both buyer and seller for a certain security. 
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Market Maker’s Activity in Practice

When trading, investors might notice different bid and ask prices: this is due to the fact that market makers will buy and then resell a certain security at a higher price. Their profit, among other activities, comes from the bid-ask spread, namely the distance between these two quotes. The higher the spread, the higher the risk that the market maker is assuming and that needs to be compensated for. A higher spread comes for example from a low liquidity associated with a particular security. Spreads might also widen amid difficult market conditions.

With Whom Do We Partner at VanEck Europe?

At VanEck Europe we pay great attention to liquidity by working together with Flow Traders who has been appointed as our contractual market maker. Moreover, we constantly work also with other market makers.

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