Constantly quote the buying and selling prices of certain securities to public investors, and accept the buying and selling requirements of public investors at this price, and trade securities with investors with their own funds and securities. Buyers and sellers don't need to wait for the appearance of counterparties, as long as market makers come forward to undertake, counterparties can reach a deal.
At the beginning of the development of the new third board market, the transaction prices were quite different, and without mature pricing understanding, the market fair was relatively deserted. In this case, when an investor wants to buy a stock, but no one wants to sell it, the market maker will sell his stock to the person who wants to buy it. When an investor wants to sell stocks, but no one wants to buy them, market makers will use their own funds to buy them. In this way, the market activity is realized. It can be seen that market makers have the function of activating and stabilizing the market, relying on an open, orderly and competitive quotation-driven mechanism.
The system is implemented by NASDAQ, the automatic quotation system of American Securities Association. Nasdaq has 5000 agents, with an average of 13 market makers trading a stock. The development of Nasdaq in the past 30 years is inseparable from this market maker system, which can play three major roles: market sitting, market building and supervision.
Sitting on the market means that when the stock market is over-speculative, market makers try to maintain the stock price and reduce the market bubble by doing the opposite with other investors in the market.
Market-making means that when the stock market is too calm, market bears artificially buy and sell stocks in the market to activate their popularity and drive other investors to realize value discovery.
Market supervision means that market makers can exercise their rights and obtain the information of trading objects to monitor the changes of the market, which can promote the coordination between the government and the market and offset the powerful influence of administrative actions. As long as there are investors in the stock market, there will be differences in size. Market makers with large holdings are actually public market makers, which are almost transactions under the sun.