MARKET MAKER

noun Also written market-maker or marketmaker (Business World) In the jargon of the Stock Exchange after big bang, a broker-dealer who deals in wholesale buying and selling, guaranteeing to make a market in a given stock; essentially the same thing as a stock-jobber before Big Bang. Etymology: Formed by compounding; the one who makes a market. The phrase make a market has been in use on the London Stock Exchange since the turn of the century; the form market maker also already existed before the big bang, but was not an official term and was used pejoratively (see below). History and Usage: The word market maker is not new, but it has been used in a new sense in the Stock Exchange since the deregulation of 1986. Whereas the market maker of the turn of the century specialized in making a market by dealing in a stock to drum up interest in it, today's market maker simply guarantees to buy and sell a specified stock and so make the market available. The main business of a market maker consists in buying stock wholesale and then selling it on at a profit; this is essentially what stock-jobbers did before the distinction between brokers and jobbers was abolished in 1986. The activity of a market maker is market making; occasionally the intransitive verb market-make is also used. After last week's hefty fall on Wall Street there must be many in the City wondering if the London equity market will suffer bouts of guruitis...when the American market makers begin to extend their influence. Sunday Telegraph 13 July 1986, p. 23 Marketmakers are obliged to deal at the price shown on their screens. The Times 20 Oct. 1986, p. 25