The market maker system is a kind of market trading system, in which a legal person with certain strength and credibility acts as a market maker, constantly provides investors with buying and selling prices, accepts investors' buying and selling requirements according to the offered prices, and trades with investors with its own funds and securities, thus providing immediacy and liquidity for the market and realizing certain profits through the bid-ask spread.

Simply put: quote the price, and buyers and sellers can buy or sell at this price without waiting for the appearance of the counterparty.

Development history:

At present, China's securities and futures trading adopts the bidding trading system-investors transmit trading orders to the exchange through the network, and the exchange computer host matches the trading orders according to the principle of time priority and price priority to form a continuous trading price. According to the price formation mechanism in this trading mode, it can also be called an instruction-driven system. In the era when there was no computer abroad 100 years ago, it was through the traders in the trading pool that the orders were matched by open bidding. The efficiency of traders in processing orders is much lower than that of computers. In order to serve a large number of investors, OTC and market maker trading systems naturally came into being.

Corresponding to the order-driven system, the market maker system is called the quotation-driven system. Market makers provide investors with bilateral quotations for betting transactions through the update of quotations, and guide the transaction price to change. Because this method is very similar to casino makers, some people are skeptical about the market maker system.

System type: Market maker system includes monopoly market maker system and competitive market maker system.

Monopoly market maker system, that is, there is only one market maker for each security, and the typical representative of this system is new york Stock Exchange. Monopoly market makers are the only traders who offer bilateral quotations for each security and enjoy corresponding rights. They must have strong comprehensive information ability, be able to accurately predict market trends, and usually get high profits because of their monopoly position. The advantage of this type is clear responsibility, which is convenient for the supervision and assessment of the exchange, but the disadvantage is poor price competition; Competitive market maker system, also known as diversified market maker system. That is, each security has multiple market makers, allowing market makers to enter and exit freely to a certain extent. The typical representative of this system is the "National Securities Association Automatic Quotation System" in the United States.