Market maker

A Wealth of Knowledge

A Market maker is a type of broker uses a dealing desk system. So if a trader uses a market maker broker, every trade they take goes through a dealing desk instead of the actual market. In a market maker broker one is basically trading against their broker. When one buys that broker will take the other side of one's trade which is to sell. Now this being a market maker and can manipulate price to benefit a broker rather than a trader. Often times, traders are traded against by a market maker broker, stopping trader's out of what could have been potentially a profitable trade. This is due to a conflict of interest that often arises as the broker itself makes money from a trader's losses as well as other transactional costs of trading. So a trader making a profit on a particular trade while they are losing a certain amount on a very trade will often result in price manipulation to benefit the broker. For more on Market makers click here.

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