Definition of a Market Maker

A market maker is a firm who quotes both a buy and a sell price in a financial instrument or commodity, hoping to make a profit on the turn or the bid/offer spread.In foreign exchange trading, where most deals are conducted Over-the-Counter and are, therefore, completely virtual, the market maker sells to and buys from its clients. Hence, the client's loss is the market-maker firm's profit and vice versa. Most foreign exchange trading firms are market makers and so are many banks, although not in all currency markets