This article explores the vital role that market makers play in the financial markets, particularly in providing liquidity and ensuring the smooth execution of trades.
It delves into how market makers operate, including their profit strategies through the bid-ask spread and risk management via delta hedging. The guide also highlights the impact of market makers on stock prices, especially in the options market.
Market makers are essential for providing liquidity, stabilizing prices, ensuring efficient pricing, and facilitating trades in financial markets, especially in options trading, by continuously quoting bid and ask prices.
