Market maker brokers create liquidity by buying and selling securities. This guide will explain the definition of market makers and how they work, along with a review of the pros and cons of this type of broker, including price manipulation. Use our list of the best market maker brokers to start trading:
Market Maker Brokers UK
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Our picks at a glance
- 1 XTB Top score: Trust 4.8 Info Visit XTB
- 2 IG Top score: Fees 4.5 Info Visit IG
- 3 Trade Nation Top score: Support 4.4 Info Visit Trade Nation
- 4 eToro Top score: Trust 4.0 Info Visit eToro
- 5 Plus500 Top score: Trust 4.1 Info Visit Plus500
- 6 Vantage Top score: Trust 4.3 Info Visit Vantage
- 7 CMC Markets Top score: Trust 4.7 Info Visit CMC Markets
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Our top pick
Established in Poland in 2002, XTB caters to over a million clients worldwide. This forex and CFD broker offers a robust regulatory framework, a diverse range of assets, and prioritises trader satisfaction. It provides an intuitive proprietary platform equipped with excellent tools to support aspiring traders.
- Instruments
- CFDs on shares, Indices, ETFs, Raw Materials, Forex currencies, Real shares, Real ETFs
- Regulator
- FCA, CySEC, KNF, DFSA, FSC, SCA, CMF, Bappebti
- Platforms
- xStation
- Min. Deposit
- $0
- Min. Trade
- 0.01 Lots
- Leverage
- 1:30 (Retail), 1:200 (Pro)
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money
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Established in 1974, IG is a unit of IG Group Holdings Plc, listed on the LSE as IGG. It provides access to over 17,000 markets through intuitive platforms and apps. For half a century, IG has remained an industry leader, excelling in all vital aspects for traders.
- Instruments
- CFDs (not in US), Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting (UK only)
- Regulator
- CFTC, NFA, FCA, BaFin, ASIC, FINMA, MAS, JFSA, FMA, DFSA, BMA, CONSOB
- Platforms
- Web, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime
- Min. Deposit
- $0
- Min. Trade
- 0.01 Lots
- Leverage
- 1:30 (Retail), 1:222 (Pro)
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
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Trade Nation is a leading FX and CFD broker regulated in the UK and Australia, among other places. The company provides competitively priced fixed and variable spreads on over 1,000 assets. Traders benefit from advanced platforms and comprehensive training materials. Additionally, the Signal Centre offers valuable trade ideas.
- Instruments
- CFDs, Forex, Indices, Shares, Commodities, Futures, Bonds, Spread Betting
- Regulator
- FCA, ASIC, CMVM , FSCA, SCB, FSA
- Platforms
- TN Trader, MT4, TradingView
- Min. Deposit
- $0
- Min. Trade
- 0.1 Lots
- Leverage
- 1:30 (Retail), 1:200 (Pro)
73.8% of retail investor accounts lose money when trading CFDs with this provider.
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eToro is a leading multi-asset platform offering CFDs, shares and cryptoassets. Founded in 2007, it serves millions of active traders worldwide and is regulated by the FCA and CySEC. It is well known for its social trading platform.
Crypto investments are high risk and may not suit retail investors. You could lose all your capital. Understand the risks here. 55% of retail CFD accounts lose money.
- Instruments
- CFDs, Forex, Stocks, Indices, ETFs, Smart Portfolios, Commodities, Futures, Crypto, NFTs
- Regulator
- FCA, CySEC, MiCA, MFSA, FSRA, ASIC, FSAS, MAS, GFSC
- Platforms
- eToro Web, CopyTrader, TradingCentral
- Min. Deposit
- $50
- Min. Trade
- $10
- Leverage
- 1:30
55% of retail investor accounts lose money when trading with this provider. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.
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Founded in 2008 and based in Israel, Plus500 is a leading brokerage with over 25 million registered traders across more than 50 countries. It focuses on CFD trading, offering a user-friendly proprietary platform and mobile app. The company provides competitive spreads and does not impose commissions or charges for deposits or withdrawals. Plus500 stands out as a highly trusted broker, licensed by respected authorities such as the FCA, ASIC, and CySEC.
- Instruments
- CFDs on Forex, Stocks, Indices, Commodities, ETFs, Options
- Regulator
- FCA, CySEC, EFSA, ASIC, FMA, FSCA, MAS, ISA, FSA, DFSA, SCA, JFSA, SCB, CIRO, BAPPEBTI, OJK, BI
- Platforms
- WebTrader, App
- Min. Deposit
- $100
- Min. Trade
- Variable
- Leverage
81% of retail CFD accounts lose money.
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Founded in 2009, Vantage provides access to over 1,000 short-term CFD products for millions of clients. Trade Forex CFDs from 0.0 pips via RAW accounts on TradingView, MT4 or MT5. FCA-regulated, Vantage segregates client funds and offers social trading tools for copy traders.
- Instruments
- CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Spread betting
- Regulator
- FCA, ASIC, FSCA, VFSC, CIMA
- Platforms
- ProTrader, MT4, MT5, TradingView, TradingCentral, DupliTrade
- Min. Deposit
- $50
- Min. Trade
- 0.01 Lots
- Leverage
- 1:30
72.65% of accounts lose money when trading CFDs with this provider.
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Founded in 1989, CMC Markets is a reputable broker publicly listed on the London Stock Exchange. It holds authorisation from top-tier regulators such as the FCA, ASIC, and CIRO. The brokerage, which has received multiple awards, boasts a global membership exceeding one million traders.
- Instruments
- CFDs, Forex, Stocks, Indices, Commodities, ETFs, Treasuries, Custom Indices, Spread Betting, Certificates and Warrants (Germany and Austria)
- Regulator
- FCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA
- Platforms
- Web, MT4, MT5, TradingView
- Min. Deposit
- $0
- Min. Trade
- 0.01 Lots
- Leverage
- 1:30 (Retail), 1:500 (Pro)
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Compare
Safety Comparison
Compare how safe the Market Makers are and what features they offer to protect traders.
| Broker | Trust Rating | FCA Regulated | Negative Balance Protection | Guaranteed Stop Loss | Segregated Accounts |
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4.6 | ||||
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4.4 | ||||
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4.3 | ||||
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4.3 | ||||
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4.4 | ||||
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4.6 | ||||
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4.8 |
Payments Comparison
Compare which popular payment methods the Market Makers support and whether they have trading accounts denominated in British Pounds (GBP).
| Broker | GBP Account | Debit Card | Credit Card | Neteller | Skrill | Apple Pay |
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Mobile Trading Comparison
How good are the Market Makers at mobile trading using apps or other mobile interfaces.
| Broker | Mobile Apps | iOS Rating | Android Rating | Smart Watch App |
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iOS & Android | 4.7 | 4.1 | |
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iOS & Android | 4.6 | 4.0 | |
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iOS & Android | 4.5 | 4.5 | |
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iOS & Android | 4.0 | 3.8 | |
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iOS, Android & Windows | 4.1 | 4.3 | |
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iOS & Android | 3.6 | 3.9 | |
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iOS & Android | 4.1 | 3.7 |
Beginners Comparison
Are the Market Makers good for beginner traders, that might want an affordable setup to get started, along with good support and educational resources?
| Broker | Demo Account | Minimum Deposit | Minimum Trade | Support Rating | Education Rating |
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$0 | 0.01 Lots | 4.3 | 3.8 | |
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$0 | 0.01 Lots | 4.5 | 4.8 | |
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$0 | 0.1 Lots | 4.9 | 4.2 | |
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$50 | $10 | 2.5 | 4.0 | |
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$100 | Variable | 4.0 | 3.0 | |
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$50 | 0.01 Lots | 3.8 | 4.0 | |
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$0 | 0.01 Lots | 4.5 | 4.3 |
Advanced Trading Comparison
Do the Market Makers offer features that allow for more advanced trading strategies?
| Broker | Automated Trading | Pro Account | Leverage | VPS | AI | Low Latency | Extended Hours |
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- | 1:30 (Retail), 1:200 (Pro) | |||||
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Expert Advisors (EAs) on MetaTrader, build your own on ProRealTime | 1:30 (Retail), 1:222 (Pro) | |||||
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Expert Advisors (EAs) on MetaTrader | 1:30 (Retail), 1:200 (Pro) | |||||
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Automate your trades via CopyTrader - follow profitable traders. Open and close trades automatically when they do. | 1:30 | |||||
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Myfxbook AutoTrade, Expert Advisors (EAs) on MetaTrader | 1:30 | |||||
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Expert Advisors (EAs) on MetaTrader | 1:30 (Retail), 1:500 (Pro) |
Detailed Rating Comparison
Use this heatmap to compare our detailed ratings for all of the Market Makers.
| Broker | Trust | Platforms | Mobile | Assets | Fees | Accounts | Support | Research | Education |
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4.6 | 4.0 | 4.4 | 4.6 | 3.9 | 4.0 | 4.3 | 4.1 | 3.8 |
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4.4 | 4.8 | 4.3 | 4.5 | 5.0 | 4.0 | 4.5 | 4.9 | 4.8 |
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4.3 | 3.9 | 4.5 | 3.7 | 4.3 | 4.2 | 4.9 | 3.9 | 4.2 |
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4.3 | 2.8 | 3.9 | 3.8 | 3.4 | 4.1 | 2.5 | 4.3 | 4.0 |
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4.4 | 3.3 | 4.2 | 3.5 | 4.0 | 4.1 | 4.0 | 2.0 | 3.0 |
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4.6 | 4.3 | 3.8 | 4.4 | 4.4 | 4.3 | 3.8 | 4.0 | 4.0 |
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4.8 | 4.3 | 3.9 | 4.7 | 4.3 | 4.5 | 4.5 | 4.5 | 4.3 |
Our Take On XTB
XTB excels for novice traders with its superb xStation platform, minimal trading costs, no required deposit, and outstanding educational resources, many of which are fully integrated into the platform.
William Berg Reviewer
Pros
- In 2026, XTB expanded its asset offerings and markets. It introduced options trading in Spain and Germany, launched spot cryptocurrencies in select regions, and unveiled Investment Plans 2.0. These enhanced plans now feature more pre-built options, including sectors like Defence, a user-friendly interface, and increased flexibility to mix stocks and ETFs within individual plans.
- The xStation platform stands out with its user-friendly design and intuitive tools, such as adaptable news feeds, sentiment heatmaps, and a trader calculator. These features streamline the learning process for new traders.
- XTB offers a superb array of educational resources, such as training videos and articles, embedded within the platform to assist traders of all experience levels.
Cons
- XTB lacks a raw spread account, a feature increasingly offered by competitors such as Pepperstone. This omission might not satisfy traders seeking the most competitive spreads.
- The demo account lasts only four weeks, posing a challenge for traders wanting to fully explore the xStation platform and refine short-term strategies before investing actual money.
- XTB has stopped supporting MT4, restricting traders to its own platform, xStation. This decision may discourage experienced traders accustomed to using the MetaTrader suite.
74% of accounts lose money when trading CFDs with this provider.
Our Take On IG
IG offers a complete package: an easy-to-use web platform, top-tier beginner education, enhanced charting via TradingView, up-to-date data, and strong trade execution for seasoned traders.
Tobias Robinson Reviewer
Pros
- IG excels with its diverse instruments, offering stocks, forex, indices, commodities, and cryptocurrencies. Additionally, it provides US-listed futures, options, and an AI Index, ensuring varied diversification opportunities.
- IG plans to broaden its offering with prediction markets on politics, sport and entertainment in the UK, subject to a gambling licence, with further regions potentially to follow.
- IG secured a crypto asset license from the FCA, enabling its return to the UK market. It now offers buying, selling, and storage services for over 55 digital tokens with fees starting at 1.49%, all under FCA regulation.
Cons
- Beginners may find IG's fees complicated, as they vary depending on the trades or services. This could cause confusion and unexpected costs.
- IG has ended its swap-free account, diminishing its attractiveness to Islamic traders.
- IG imposes a monthly inactivity fee of $12 to $18 after two years, discouraging occasional investors.
70% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Our Take On Trade Nation
Trade Nation caters to discretionary traders aiming to speculate on major indices like the US 500 or liquid FX pairs, with the certainty of fixed spreads. Our tests revealed the TN Trader's fixed spreads to be advantageous, especially during economic announcements, thanks to its dependable charting and capped spreads.
Tobias Robinson Reviewer
Pros
- Trade Nation's 2026 alliance with Volt has streamlined payments for Australian traders, enabling instant deposits and withdrawals via PayID. Faster payout features are also anticipated for UK and EU clients.
- The broker expanded into Europe after receiving CMVM approval in Portugal, enhancing protections for European clients.
- During tests of the TN Trader account in standard market conditions, fixed spreads remained stable. Major forex pairs experienced prompt order fills, albeit with slight entry level drift as prices fluctuated between click and execution.
Cons
- Offshore SCB and FSA firms offer retail investors leverage up to 1:200 and 1:500. In contrast, regions like the UK, Europe, and Australia cap leverage at 1:30. Thus, an FSA client can access 16 times more exposure than a UK retail client on identical trades. However, this comes with reduced oversight and no compensation schemes.
- The FCA, CMVM, and ASIC clients are ineligible for the 2–20% rebate scheme. Consequently, active traders in these areas cannot receive transaction rebates.
- There is no raw or ECN pricing tier, often favoured by traders. Regardless of your deposit or trading volume, you receive the same fixed (or variable on MT4) pricing as novices, rendering it particularly unsuitable for scalpers.
73.8% of retail investor accounts lose money when trading CFDs with this provider.
Our Take On eToro
eToro's social trading platform excels with its outstanding user experience and lively community chat, aiding beginners in spotting opportunities. It offers competitive fees on numerous CFDs and real stocks, alongside exceptional rewards for seasoned strategists.
Tobias Robinson Reviewer
Pros
- In July 2026, eToro Edge introduced significant enhancements, including a charting package tailored for active traders and AI trading via Tori.
- The trading app provides a top-tier social environment featuring an engaging feed and community chat, which we enjoy using.
- The entry requirements for eToro Club have been reduced. For $4.99 monthly, members enjoy 18 benefits, including a debit card that converts purchases into stocks with a 4% share return.
Cons
- The absence of extra charting platforms such as MT4 may deter experienced traders who rely on external software.
- There are no assured stop-loss orders, which could be a valuable risk management tool for novice traders.
- The minimum withdrawal is set at $30, accompanied by a $5 fee. This may impact traders with limited funds, particularly those just starting out.
55% of retail CFD accounts lose money. eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
Our Take On Plus500
Plus500 provides a seamless experience for traders with its CFD platform, featuring a sleek design and interactive charting. However, its research tools are basic, fees are higher than the most economical brokers, and its educational resources could be improved.
Tobias Robinson Reviewer
Pros
- Plus500 offers a dedicated WebTrader platform tailored specifically for CFD trading. It features a user-friendly and streamlined interface.
- In 2025, Plus500 introduced new share CFDs in emerging sectors such as quantum computing and AI, presenting opportunities in stocks like IonQ, Rigetti, Duolingo, and Carvana.
- The broker provides low-commission trading across varied markets, reducing extra fees and attracting seasoned traders.
Cons
- Plus500's omission of MetaTrader and cTrader charting tools may deter seasoned traders seeking familiar platforms.
- Educational resources are not as extensive as leading brokers such as eToro, which affects beginners' ability to learn quickly.
- The lack of social trading features prevents users from copying trades made by seasoned traders.
81% of retail CFD accounts lose money.
Our Take On Vantage
Vantage is an ideal choice for CFD traders looking for a well-regulated broker with access to the dependable MetaTrader platforms. With a swift sign-up process and a minimum deposit of $50, starting trading is simple and fast.
Tobias Robinson Reviewer
Pros
- Vantage upholds a high trust score through its solid reputation, backed by premier regulation from the FCA and ASIC.
- In 2026, the app was enhanced to provide comprehensive asset visibility, consolidating balances from Contract, Copy, and Funding accounts onto a single screen.
- Vantage has enhanced its trading tools for experienced traders, introducing AutoFibo EA to pinpoint potential market reversals.
Cons
- It's unfortunate that some clients must register with the offshore firm, which provides reduced regulatory safeguards.
- To access optimal trading conditions, a substantial deposit of $10,000 is required. This includes a commission of $1.50 per transaction per side.
- Based on tests, average execution speeds of 100ms to 250ms are slower compared to other options.
72.65% of accounts lose money when trading CFDs with this provider.
Our Take On CMC Markets
Equipped with advanced charts and a broad array of tradable CFDs, including an unmatched selection of currencies and bespoke indices, CMC Markets offers an excellent online platform for traders at any level.
Tobias Robinson Reviewer
Pros
- The CMC web platform offers an excellent user experience, featuring advanced trading chart tools and customisable options, suitable for both novice and seasoned traders. It also supports MT4, MT5, and, from 2025, TradingView.
- CMC Markets has introduced an AI News feature. This leverages AI to highlight and summarise market stories instead of executing trades, suggesting the future direction of broker research tools.
- We upgraded its 'Assets & Markets' rating due to frequent product expansions in 2025 and 2026. These include extended hours for 5,000+ US stocks and ETFs, new share CFDs, certificates, warrants, and fractional shares in certain areas.
Cons
- Although there have been improvements, the online platform still needs further refinement to match the user-friendly trading experience offered by competitors such as IG.
- A £15 monthly inactivity fee applies after a year of no activity, possibly discouraging casual investors.
- The CMC Markets app provides a comprehensive trading package; however, its design and user experience lag behind market leaders such as eToro.
69% of retail CFD accounts lose money when trading with this provider.
What Are Market Makers?
Market makers actively quote two sides of a market in a particular security. They play a key role by lodging bids and asks for securities, providing liquidity and depth to markets while profiting from the spread. The most common types of market makers are large banks, financial institutions, and brokerages, giving traders sales and purchase solutions on financial assets.
The presence of market makers plays a big role in ensuring that trading can go ahead seamlessly, meaning if you wish to buy or sell an asset, they will be there to fill your order. If you are trading with a market maker broker, then the brokerage itself will be the counterparty to your trades.
Major FCA-authorised market maker brokers include CMC Markets. Other large market makers that are regulated in the UK include examples like Barclays Bank, BNP Paribas, Citibank, DRW Investments, Lloyds Bank, Natwest Markets, and Standard Chartered.
Making Money – How Does It Work?
Market makers gain revenue through the bid-ask spread that they quote. While market maker brokers follow the general price of the real market, they are not obligated to quote the exact prices. They have the freedom to quote their own prices, and they will usually quote lower bids and higher asks. Since they trade both sides of the market simultaneously, they profit from the difference in price.
As the spread effectively acts as a charge on each trade, market maker brokers that offer tighter spreads are typically more desirable for traders.
Market Makers Vs Trading Brokers
Market makers are not always brokers, with most being banks or other large financial institutions. However, some brokers are also market makers. For example, IG is an FCA-authorised market maker broker in the UK.
Market makers’ role is to provide liquidity to the market; as such, they hold an inventory of tradable financial assets. When they quote their bid-ask prices, they must also quote the tradable volume. When trades are performed with a market maker, they will either buy assets directly from the trader or sell their assets to the trader, making money through the spread between the quoted prices.
Brokers, on the other hand, are intermediaries who facilitate trades between two parties and have the authorisation and expertise to buy/sell financial assets on the trader’s behalf. They usually make money by charging a commission for their services.
However, market maker brokers can trade directly with investors using their asset inventories and setting their own prices, typically allowing them to make money through spreads rather than commissions – although some brokers apply both.
Trading with a market maker broker does come with risk, however. The broker is not always a market maker in all the assets it offers, so it may push the ones that it is a maker for or manipulate the price of those assets to maximise their profits.
Over-the-counter (OTC) CFD brokers can also be market makers, as they typically provide the contracts while also acting as the counterparty, making the market. Because no underlying assets are traded in these contracts, commissions are usually low or zero for share CFDs, and spreads vary between brokers.
IG is a UK-based market maker brokerage that offers real assets and CFD trading. On stock CFDs, they offer no spreads but charge commissions, while on other CFDs they charge spreads. For example, the EUR/GBP forex pair has a minimum spread of 0.9 pips, and an average spread of 2.51 pips.
Pros Of Market Makers
- Both prices and volume are quoted
- Typically low or no commission fees
- The broker acts as counterparty, allowing for quicker trades
- High liquidity as market makers buy and hold stocks/shares/cryptos/options etc
- Market makers available on most major exchanges, including the London Stock Exchange (LSE)
Cons Of Market Makers
- Not all market makers offer brokerage services to retail traders
- Market makers can have conflicts of interest and may trade against you with limited price obligations
- Prices are determined by the market maker, possibly leading to wider spreads
- Limited FCA-authorised market maker brokers
How To Compare Market Maker Brokers
Financial Instruments
Brokers will be market makers for different assets on different exchanges, like the LSE, the AIM, Nasdaq OMX, ICE and LME. Choose a market maker broker that offers the assets you want to trade.
Fee Structure
Market makers typically make money through the spread, so look for a broker that offers tight, competitive spreads on your preferred assets. Also, keep in mind any other fees the broker charges, like overnight holding fees, deposit/withdrawal fees, inactivity fees, subscription fees and so on.
Finding the right balance between features offered and fees charged will allow you to maximise revenue while minimising costs.
Trading Platforms
The trading platform is one of the most important aspects to consider when choosing a broker. Platforms offer different features, with some, like MetaTrader 4 and MetaTrader 5, providing a fuller range of indicators and tools, while others aim to be intuitive and easy to use.
Select a market maker broker that supports a platform you are comfortable using, and where possible test drive it with a demo account so you can practice making trades on the platform without risking any capital.
Base Currency
Market maker brokers with GBP as their base currency are a good option for UK traders since they negate currency conversion fees. You may wish to access a market that uses a different base currency, but bear in mind that this may automatically lower the value of your deposit by applying a cost before you open a trade.
Regulation
Regulated market makers are usually safer to trade with than unregulated brokers as respected agencies like the FCA have strong fund protection measures in place, alongside corporate governance and other requirements. These include the separation of funds, negative balance protection, fund insurance and risk warnings explained.
How To Start Trading With A Market Maker Broker
- Choose a broker by comparing the list of available market maker brokers that trade your preferred assets. Refer to our guide above for the factors to consider when choosing between companies.
- Sign up by filling out the broker’s registration form, verifying your email address and uploading any documents or other necessary information.
- Fund your account using your preferred payment method. Check the broker’s payments page when you sign up to ensure you have a quick and affordable way to transact.
- Plan a trade by logging onto the platform or a chart site and using indicators and other analysis tools to identify the best time to execute a trade.
- Open your position by following the procedure on the market maker broker’s platform. This usually involves selecting the asset to trade from a list, choosing between a market and limit order, defining the volume you wish to open, and setting stop loss and take profit orders.
- Monitor market movements to make sure you are aware of price fluctuations and don’t miss the optimal time to exit your position.
- Close your position when you are satisfied with the profit you have made, or if you sense a trend reversal or want to limit your losses.
Bottom Line On Market Maker Brokers
Market makers play a key role in providing liquidity to financial markets, and without them, trading would be difficult. Brokers that are also market makers give traders access to this liquidity, facilitating quick trades directly with the broker. They also take their place in many different markets, including those trading real shares as well as CFDs.
There are numerous FCA-authorised and regulated market maker brokers available in the UK, with IG, for example, offering access to more than 18,000 markets. Although some market maker brokers can pose conflicts of interest, traders can find trustworthy firms that offer competitive fees and zero commission. Use our ranking of the best market maker brokers to get started.
FAQ
What Is A Market Maker?
A market maker is a firm or individual that quotes two-sided markets, offering bids, asks, and the market size of a selection of financial instruments. Since the market maker owns the assets in its inventory, it is ready to quickly provide them to traders, providing liquidity and depth to markets and facilitating seamless trading.
Do Market Makers Manipulate Prices?
Market makers control the prices they quote, and have no obligation to quote exact market prices. Instead, they typically profit from the bid-ask spread in the prices they quote.
Brokers that are also market makers may have a conflict of interest with traders, promoting assets that they make markets for with wider spreads to maximise their profits. However, this is not always the case due to rising competition, especially in OTC CFD markets.
What Are Market Maker Brokers Also Known As?
Market makers are also known as liquidity providers for their ability to bring large amounts of liquidity to the market as they can immediately buy/sell assets from their inventory of financial instruments. Both bid-ask spreads and the tradable volume is quoted by the broker, indicating how much liquidity for each asset is available.
What Are The Key Market Makers In The London Stock Exchange (LSE)?
Some of the major market makers on the London Stock Exchange include BNP Paribas, Standard Chartered and GMP Securities. The FCA list all authorised market makers and primary dealers in a document available on their website.
Do Market Maker Brokers Hold Stock?
Market makers do hold stock, allowing them to provide liquidity easily. Furthermore, brokers that are market makers are able to trade this stock directly to retail traders. This allows for trading at the quoted prices rather than paying a high commission fee.