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Extremely-Bad-Idea t1_iu9q5wj wrote

Reply to comment by ringingbells in Is it just me, or is a a Market Makers' role in Order/Execution/Settlement confusing? Question: The CEO of Webull talked about their Market Maker, saying: "We're able to buy a share without driving up the stock 10% every time?" What does this work with Price Discovery & Supply & Demand? by ringingbells

Marker makers are doing the exact same thing that exchanges do. They match buyers and sellers.

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stockpyler t1_iubiacb wrote

But they do it internally so as not to affect the stock price on the exchange, where the actual price is quoted from right? The exchange that never sees those buy/sell orders?

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[deleted] t1_iu9rdmr wrote

[deleted]

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Extremely-Bad-Idea t1_iu9t5z9 wrote

I am unaware of any volume requirements that the NYSE or NASDAQ are required to maintain as part of their SEC licensing. Obviously they are huge and process billions of shares in trade every business day.

Regarding individual market makers, I believe that any SEC licensed brokerage can be a market maker for one or more stocks. Big brokerages, such as Fidelity and Schwab, can easily make internal matches between buyers and sellers for heavily traded stocks like Microsoft, Exxon, and Macy's. However, they may need to still need to divert some orders to exchanges when they can't match them immediately.

For thinly traded stocks, such a small caps, the exchanges are very important. Even big brokerages typically cannot be market makers for those.

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ringingbells OP t1_iu9t5oj wrote

>"Marker makers are doing the exact same thing that exchanges do."

  • What trading volume, as a Market Maker or entity, do you need to hit to require induction as a public exchange?

  • For that matter, as a side note, what is the trading volume of the current market maker deck compared to public exchanges like Nasdaq, Cboe, NYSE, etc...?

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