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Broker vs. Market Maker: What's the Difference?

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  A broker makes money by bringing together assets to buyers and sellers, while a market maker helps to create a market for investors to buy or sell securities.

The article from Investopedia explains the roles and differences between brokers and market makers in the financial markets. Brokers act as intermediaries who execute trades on behalf of clients, charging a fee or commission for their services. They can work for brokerage firms or be independent, and their primary duty is to find the best possible price for their clients' transactions. On the other hand, market makers are entities or individuals that provide liquidity to the market by continuously buying and selling securities at publicly quoted prices. They profit from the spread between the bid and ask prices. Market makers are obligated to buy or sell when there are no other buyers or sellers, thus ensuring market liquidity. While brokers focus on client interests, market makers focus on maintaining an orderly market. The distinction is crucial as it affects how transactions are processed, the costs involved, and the overall market dynamics.

Read the Full Investopedia Article at:
[ https://www.investopedia.com/ask/answers/06/brokerandmarketmaker.asp ]

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