Market Maker

A market maker is a financial institution or trader that commits to continuously quoting both buy and sell prices for a specific asset - such as a precious metal - in order to ensure liquidity in the market. Market makers help stabilize markets by absorbing supply and demand imbalances and reducing volatility.

In the context of precious metals trading, market makers are essential, especially in over-the-counter (OTC) or electronic markets, where they enable the execution of orders even in volatile or thinly traded conditions. By providing constant bid and ask quotes, they allow other participants to enter and exit positions more efficiently.

Market makers are also important for hedging strategies, as they facilitate the rapid execution of derivative instruments such as forwards, swaps, or options - critical for dealers and refiners managing price risk in real time.